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Pharmacyclics, Inc. (NASDAQ:PCYC): Are Hedge Funds Right About This Stock?

Is Pharmacyclics, Inc. (NASDAQ:PCYC) a healthy stock for your portfolio? Investors who are in the know are becoming hopeful. The number of bullish hedge fund bets inched up by 1 recently.

To most traders, hedge funds are assumed to be worthless, outdated financial tools of the past. While there are over 8000 funds with their doors open today, we hone in on the upper echelon of this club, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by tracking their highest performing picks, we have unsheathed a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Pharmacyclics, Inc. (NASDAQ:PCYC)

Equally as beneficial, bullish insider trading sentiment is a second way to break down the marketplace. There are plenty of reasons for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action surrounding Pharmacyclics, Inc. (NASDAQ:PCYC).

What does the smart money think about Pharmacyclics, Inc. (NASDAQ:PCYC)?

At the end of the fourth quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of 6% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Julian Baker and Felix Baker’s Baker Bros. Advisors had the most valuable position in Pharmacyclics, Inc. (NASDAQ:PCYC), worth close to $661 million, accounting for 17.3% of its total 13F portfolio. Coming in second is Visium Asset Management, managed by Jacob Gottlieb, which held a $48 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Daniel Gold’s QVT Financial, Steven Cohen’s SAC Capital Advisors and Jérôme Pfund and Michael Sjöström’s Sectoral Asset Management.

As one would reasonably expect, specific money managers have been driving this bullishness. Gotham Asset Management, managed by Joel Greenblatt, established the largest position in Pharmacyclics, Inc. (NASDAQ:PCYC). Gotham Asset Management had 2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $2 million position during the quarter. The other funds with brand new PCYC positions are Israel Englander’s Millennium Management, Mike Vranos’s Ellington, and James Dondero’s Highland Capital Management.

What have insiders been doing with Pharmacyclics, Inc. (NASDAQ:PCYC)?

Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time period, Pharmacyclics, Inc. (NASDAQ:PCYC) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned studies, everyday investors must always monitor hedge fund and insider trading activity, and Pharmacyclics, Inc. (NASDAQ:PCYC) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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