Santarus, Inc. (NASDAQ:SNTS) investors should pay attention to a decrease in hedge fund interest in recent months.
If you’d ask most shareholders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds trading at present, we hone in on the upper echelon of this club, about 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top equity investments, we have figured out a few investment strategies that have historically outstripped Mr. Market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as beneficial, bullish insider trading activity is a second way to break down the stock market universe. Obviously, there are plenty of incentives for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, let’s take a gander at the latest action surrounding Santarus, Inc. (NASDAQ:SNTS).
How are hedge funds trading Santarus, Inc. (NASDAQ:SNTS)?
In preparation for this quarter, a total of 15 of the hedge funds we track were long in this stock, a change of -6% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Jacob Gottlieb’s Visium Asset Management had the biggest position in Santarus, Inc. (NASDAQ:SNTS), worth close to $49.6 million, accounting for 1.3% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $44.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Kevin Kotler’s Broadfin Capital, Mark Kingdon’s Kingdon Capital and Cliff Asness’s AQR Capital Management.
Due to the fact that Santarus, Inc. (NASDAQ:SNTS) has witnessed falling interest from the smart money, it’s easy to see that there was a specific group of funds that decided to sell off their entire stakes last quarter. Intriguingly, SAC Subsidiary’s Sigma Capital Management cut the largest investment of all the hedgies we monitor, worth close to $3.8 million in stock., and D. E. Shaw of D E Shaw was right behind this move, as the fund dropped about $2.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
How have insiders been trading Santarus, Inc. (NASDAQ:SNTS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, Santarus, Inc. (NASDAQ:SNTS) has experienced 1 unique insiders purchasing, and 14 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Santarus, Inc. (NASDAQ:SNTS). These stocks are MannKind Corporation (NASDAQ:MNKD), PDL BioPharma Inc. (NASDAQ:PDLI), Sarepta Therapeutics Inc (NASDAQ:SRPT), Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), and VIVUS, Inc. (NASDAQ:VVUS). All of these stocks are in the biotechnology industry and their market caps are closest to SNTS’s market cap.