This Metric Says You Are Smart to Sell Biogen Idec Inc. (NASDAQ:BIIB)

Is Biogen Idec Inc. (NASDAQ:BIIB) an attractive investment right now? The best stock pickers are becoming less hopeful. The number of long hedge fund bets decreased by 6 recently.

According to most investors, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we choose to focus on the top tier of this group, close to 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds’ total asset base, and by tracking their top investments, we have brought to light a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Biogen Idec Inc (NASDAQ:BIIB)Just as important, bullish insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are plenty of reasons for an executive to drop shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the valuable potential of this method if you know where to look (learn more here).

Now, it’s important to take a peek at the latest action surrounding Biogen Idec Inc. (NASDAQ:BIIB).

Hedge fund activity in Biogen Idec Inc. (NASDAQ:BIIB)

In preparation for this year, a total of 31 of the hedge funds we track were long in this stock, a change of -16% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.

According to our comprehensive database, Andreas Halvorsen’s Viking Global had the most valuable position in Biogen Idec Inc. (NASDAQ:BIIB), worth close to $399 million billion, accounting for 2.8% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $245 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Jérôme Pfund and Michael Sjöström’s Sectoral Asset Management, D. E. Shaw’s D E Shaw and Donald Chiboucis’s Columbus Circle Investors.

Since Biogen Idec Inc. (NASDAQ:BIIB) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers who sold off their full holdings heading into 2013. At the top of the heap, Louis Navellier’s Navellier & Associates dropped the biggest investment of the “upper crust” of funds we track, valued at about $64 million in stock.. Stanley Druckenmiller’s fund, Duquesne Capital, also said goodbye to its stock, about $30 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 6 funds heading into 2013.

What do corporate executives and insiders think about Biogen Idec Inc. (NASDAQ:BIIB)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last six-month time period, Biogen Idec Inc. (NASDAQ:BIIB) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned research, everyday investors should always watch hedge fund and insider trading activity, and Biogen Idec Inc. (NASDAQ:BIIB) is no exception.

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

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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