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Should You Buy Medivation Inc (MDVN)?

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Medivation Inc (NASDAQ:MDVN) has experienced an increase in enthusiasm from smart money recently.

Medivation IncIn the eyes of most stock holders, hedge funds are assumed to be worthless, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading today, we at Insider Monkey choose to focus on the leaders of this club, about 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total asset base, and by keeping an eye on their top stock picks, we have figured out a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as integral, positive insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a number of incentives for an executive to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this method if investors know where to look (learn more here).

With these “truths” under our belt, let’s take a peek at the latest action encompassing Medivation Inc (NASDAQ:MDVN).

How have hedgies been trading Medivation Inc (NASDAQ:MDVN)?

Heading into Q2, a total of 34 of the hedge funds we track were bullish in this stock, a change of 10% from the first quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Medivation Inc (NASDAQ:MDVN). Adage Capital Management has a $183.4 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Fred Knoll of Knoll Capital Management, with a $118 million position; the fund has 86% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Christopher Medlock James’s Partner Fund Management, Donald Chiboucis’s Columbus Circle Investors and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.

With a general bullishness amongst the heavyweights, key money managers have jumped into Medivation Inc (NASDAQ:MDVN) headfirst. Knoll Capital Management, managed by Fred Knoll, established the most outsized position in Medivation Inc (NASDAQ:MDVN). Knoll Capital Management had 118 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $3.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, James Dondero’s Highland Capital Management, and Mike Vranos’s Ellington.

What do corporate executives and insiders think about Medivation Inc (NASDAQ:MDVN)?

Insider buying is best served when the company we’re looking at has experienced transactions within the past half-year. Over the last half-year time frame, Medivation Inc (NASDAQ:MDVN) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Medivation Inc (NASDAQ:MDVN). These stocks are Theravance Inc (NASDAQ:THRX), Seattle Genetics, Inc. (NASDAQ:SGEN), Incyte Corporation (NASDAQ:INCY), Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ), and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). All of these stocks are in the biotechnology industry and their market caps match MDVN’s market cap.

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