What's a smart Cytokinetics, Inc. (NASDAQ:CYTK) investor to do?
In the eyes of many of your peers, hedge funds are seen as useless, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds trading in present day, Insider Monkey aim at the aristocrats of this group, about 525 funds. Analysts calculate that this group controls the lion's share of the hedge fund industry's total assets, and by watching their highest performing stock picks, we've found a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as necessary, bullish insider trading sentiment is another way to analyze the marketplace. Just as you'd expect, there are a number of reasons for an executive to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Furthermore, we're going to analyze the latest info about Cytokinetics, Inc. (NASDAQ:CYTK).
At Q2's end, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.
According to our 13F database, Deerfield Management, managed by James E. Flynn, holds the largest position in Cytokinetics, Inc. (NASDAQ:CYTK). Deerfield Management has a $20.6 million position in the stock, comprising 1% of its 13F portfolio. The second largest stake is held by Paul Ruddock and Steve Heinz of Lansdowne Partners, with a $20.1 million position; 0.3% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Israel Englander's Millennium Management, and Millennium Management Subsidiary's Green Arrow Capital Management.
As Cytokinetics, Inc. (NASDAQ:CYTK) has witnessed a fall in interest from upper-tier hedge fund managers, it's easy to see that there lies a certain "tier" of hedge funds that elected to cut their full holdings last quarter. Interestingly, Anand Parekh's Alyeska Investment Group said goodbye to the largest stake of the 450+ funds we watch, worth about $0.6 million in call options.. Anand Parekh's fund, Alyeska Investment Group, also cut its call options., about $0.5 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, Cytokinetics, Inc. (NASDAQ:CYTK) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Cytokinetics, Inc. (NASDAQ:CYTK). These stocks are ShangPharma Corp (ADR) (NYSE:SHP), ArQule, Inc. (NASDAQ:ARQL), OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI), Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN), and Durata Therapeutics Inc (NASDAQ:DRTX). This group of stocks are in the biotechnology industry and their market caps are similar to CYTK's market cap.