Horizon Pharma Inc (NASDAQ:HZNP) has seen a decrease in activity from the world’s largest hedge funds of late.
According to most shareholders, hedge funds are perceived as unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we look at the elite of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total capital, and by keeping an eye on their highest performing stock picks, we have found a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 24 percentage points in 7 months (see the details here).
Just as beneficial, bullish insider trading activity is another way to parse down the world of equities. Obviously, there are a variety of reasons for an executive to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this method if investors know what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the recent action regarding Horizon Pharma Inc (NASDAQ:HZNP).
How are hedge funds trading Horizon Pharma Inc (NASDAQ:HZNP)?
In preparation for this year, a total of 7 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Thomas Steyer’s Farallon Capital had the largest position in Horizon Pharma Inc (NASDAQ:HZNP), worth close to $5.2 million, accounting for 0.1% of its total 13F portfolio. On Farallon Capital’s heels is Anand Parekh of Alyeska Investment Group, with a $2.9 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Anand Parekh’s Alyeska Investment Group, Carl Goldsmith and Scott Klein’s Beach Point Capital Management and Israel Englander’s Millennium Management.
Seeing as Horizon Pharma Inc (NASDAQ:HZNP) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that slashed their entire stakes heading into 2013. At the top of the heap, Joseph Edelman’s Perceptive Advisors cut the largest stake of the 450+ funds we watch, worth close to $0.2 million in stock. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Horizon Pharma Inc (NASDAQ:HZNP)?
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the last half-year time period, Horizon Pharma Inc (NASDAQ:HZNP) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Horizon Pharma Inc (NASDAQ:HZNP). These stocks are AcelRx Pharmaceuticals Inc (NASDAQ:ACRX), SIGA Technologies, Inc. (NASDAQ:SIGA), Zogenix, Inc. (NASDAQ:ZGNX), TherapeuticsMD Inc (OTC:TXMD), and Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE). This group of stocks belong to the drug manufacturers – major industry and their market caps match HZNP’s market cap.
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| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| AcelRx Pharmaceuticals Inc (NASDAQ:ACRX) | 6 | 1 | 0 |
| SIGA Technologies, Inc. (NASDAQ:SIGA) | 3 | 0 | 0 |
| Zogenix, Inc. (NASDAQ:ZGNX) | 7 | 4 | 0 |
| TherapeuticsMD Inc (OTC:TXMD) | 0 | 0 | |
| Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE) | 1 | 0 | 0 |
With the results shown by Insider Monkey’s studies, retail investors must always monitor hedge fund and insider trading sentiment, and Horizon Pharma Inc (NASDAQ:HZNP) is an important part of this process.
