XenoPort, Inc. (NASDAQ:XNPT) was in 13 hedge funds’ portfolio at the end of December. XNPT investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 15 hedge funds in our database with XNPT holdings at the end of the previous quarter.
In the financial world, there are many methods market participants can use to analyze stocks. Two of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outclass the S&P 500 by a healthy margin (see just how much).
Equally as key, optimistic insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are plenty of stimuli for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a look at the recent action regarding XenoPort, Inc. (NASDAQ:XNPT).
Hedge fund activity in XenoPort, Inc. (NASDAQ:XNPT)
At the end of the fourth quarter, a total of 13 of the hedge funds we track were long in this stock, a change of -13% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Deerfield Management, managed by James E. Flynn, holds the most valuable position in XenoPort, Inc. (NASDAQ:XNPT). Deerfield Management has a $21 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Samuel Isaly of OrbiMed Advisors, with a $18 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Julian Baker and Felix Baker’s Baker Bros. Advisors, D. E. Shaw’s D E Shaw and Phill Gross and Robert Atchinson’s Adage Capital Management.
Seeing as XenoPort, Inc. (NASDAQ:XNPT) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedge funds that elected to cut their entire stakes heading into 2013. Intriguingly, Richard Schimel’s Diamondback Capital sold off the largest investment of the 450+ funds we watch, valued at about $8 million in stock.. Robert Pohly’s fund, Samlyn Capital, also dropped its stock, about $5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into 2013.
Insider trading activity in XenoPort, Inc. (NASDAQ:XNPT)
Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, XenoPort, Inc. (NASDAQ:XNPT) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to XenoPort, Inc. (NASDAQ:XNPT). These stocks are Obagi Medical Products, Inc. (NASDAQ:OMPI), Vical Incorporated (NASDAQ:VICL), Osiris Therapeutics, Inc. (NASDAQ:OSIR), Novavax, Inc. (NASDAQ:NVAX), and 3SBio Inc. (ADR) (NASDAQ:SSRX). This group of stocks belong to the biotechnology industry and their market caps are similar to XNPT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Obagi Medical Products, Inc. (NASDAQ:OMPI) | 7 | 0 | 0 |
| Vical Incorporated (NASDAQ:VICL) | 8 | 5 | 0 |
| Osiris Therapeutics, Inc. (NASDAQ:OSIR) | 1 | 1 | 3 |
| Novavax, Inc. (NASDAQ:NVAX) | 5 | 1 | 0 |
| 3SBio Inc. (ADR) (NASDAQ:SSRX) | 9 | 0 | 0 |
With the returns demonstrated by the aforementioned strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and XenoPort, Inc. (NASDAQ:XNPT) is no exception.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.
