Is Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) the right investment to pursue these days? The smart money is taking a pessimistic view. The number of long hedge fund bets dropped by 3 lately.
In today’s marketplace, there are tons of metrics shareholders can use to analyze stocks. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can trounce their index-focused peers by a very impressive amount (see just how much).
Just as important, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are a number of incentives for an insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if “monkeys” know where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action surrounding Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX).
How have hedgies been trading Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX)?
At the end of the fourth quarter, a total of 7 of the hedge funds we track were long in this stock, a change of -30% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX), worth close to $9.8 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Perceptive Advisors, managed by Joseph Edelman, which held a $5.3 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Steven Cohen’s SAC Capital Advisors, SAC Subsidiary’s Sigma Capital Management and D. E. Shaw’s D E Shaw.
Since Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds that elected to cut their full holdings last quarter. At the top of the heap, Israel Englander’s Millennium Management dropped the largest investment of all the hedgies we watch, comprising close to $0.5 million in stock.. Wayne Holman’s fund, Ridgeback Capital Management, also sold off its stock, about $0.2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds last quarter.
How are insiders trading Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX)?
Insider buying is best served when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time frame, Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) has seen 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). These stocks are Nektar Therapeutics (NASDAQ:NKTR), PDL BioPharma Inc. (NASDAQ:PDLI), Sarepta Therapeutics Inc (NASDAQ:SRPT), VIVUS, Inc. (NASDAQ:VVUS), and Santarus, Inc. (NASDAQ:SNTS). This group of stocks are in the biotechnology industry and their market caps are similar to LXRX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Nektar Therapeutics (NASDAQ:NKTR)||9||0||0|
|PDL BioPharma Inc. (NASDAQ:PDLI)||14||0||0|
|Sarepta Therapeutics Inc (NASDAQ:SRPT)||16||0||1|
|VIVUS, Inc. (NASDAQ:VVUS)||19||0||0|
|Santarus, Inc. (NASDAQ:SNTS)||16||1||12|
With the returns demonstrated by our research, everyday investors must always monitor hedge fund and insider trading activity, and Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) is an important part of this process.