Theravance Inc (NASDAQ:THRX) has experienced a decrease in support from the world's most elite money managers of late, but insiders on the whole appear bullish. More importantly, shares of Theravance are up more than 18% today on the hope of a fruitful FDA decision later this week. With that in mind, it's important to look at how hedge funds and insiders have been trading it of late.
To the average investor, there are tons of methods investors can use to watch their holdings. Two of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the market by a solid amount (see just how much).
Just as integral, optimistic insider trading activity is another way to break down the stock market universe. As the old adage goes: there are a variety of incentives for a bullish insider to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this tactic if investors know where to look (learn more here).
With these "truths" under our belt, we're going to take a look at the key action surrounding Theravance Inc (NASDAQ:THRX).
At the end of the fourth quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -23% from the third quarter. With hedge funds' sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Baupost Group, managed by Seth Klarman, holds the most valuable position in Theravance Inc (NASDAQ:THRX). Baupost Group has a $301.4 million position in the stock, comprising 9.7% of its 13F portfolio. Sitting at the No. 2 spot is David Cohen and Harold Levy of Iridian Asset Management, with a $71.4 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Jerome Pfund and Michael Sjostrom's Sectoral Asset Management, Jamie Zimmerman's Litespeed Management and Jean-Marie Eveillard's First Eagle Investment Management.
Because Theravance Inc (NASDAQ:THRX) has faced a declination in interest from the aggregate hedge fund industry, we can see that there were a few hedgies who were dropping their positions entirely heading into 2013. Interestingly, John Overdeck and David Siegel's Two Sigma Advisors dropped the biggest investment of the "upper crust" of funds we track, totaling about $0.8 million in stock., and Cliff Asness of AQR Capital Management was right behind this move, as the fund said goodbye to about $0.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into 2013.
Insider trading activity, especially when it's bullish, is best served when the company we're looking at has seen transactions within the past 180 days. Over the last six-month time period, Theravance Inc (NASDAQ:THRX) has experienced 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Theravance Inc (NASDAQ:THRX). These stocks are Incyte Corporation (NASDAQ:INCY), Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), Questcor Pharmaceuticals Inc (NASDAQ:QCOR), Charles River Laboratories (NYSE:CRL), and Infinity Pharmaceuticals Inc. (NASDAQ:INFI). All of these stocks are in the biotechnology industry and their market caps are closest to THRX's market cap.