Is Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) a healthy stock for your portfolio? Money managers are taking a bullish view. The number of bullish hedge fund positions inched up by 3 lately.
At the moment, there are dozens of gauges shareholders can use to track stocks. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce their index-focused peers by a healthy amount (see just how much).
Just as important, bullish insider trading activity is another way to parse down the investments you’re interested in. There are many reasons for an insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the key action encompassing Arena Pharmaceuticals, Inc. (NASDAQ:ARNA).
Hedge fund activity in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)
At year’s end, a total of 11 of the hedge funds we track held long positions in this stock, a change of 38% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies we track, Deerfield Management, managed by James E. Flynn, holds the most valuable position in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). Deerfield Management has a $67.5 million position in the stock, comprising 3.7% of its 13F portfolio. On Deerfield Management’s heels is Daniel Gold of QVT Financial, with a $14.9 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Drew Cupps’s Cupps Capital Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
Now, some big names have been driving this bullishness. Dialectic Capital Management, managed by John Fichthorn, created the most valuable position in Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). Dialectic Capital Management had 1.1 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $0.5 million position during the quarter. The following funds were also among the new ARNA investors: Israel Englander’s Millennium Management and Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners.
How are insiders trading Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)?
Insider buying is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). These stocks are Charles River Laboratories (NYSE:CRL), Synageva BioPharma Corp (NASDAQ:GEVA), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), Viropharma Inc (NASDAQ:VPHM), and Questcor Pharmaceuticals Inc (NASDAQ:QCOR). This group of stocks are the members of the biotechnology industry and their market caps resemble ARNA’s market cap.