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Conceptus, Inc. (CPTS): Insiders Are Dumping, Should You?

Is Conceptus, Inc. (NASDAQ:CPTS) a buy right now? Hedge funds are buying. The number of long hedge fund bets rose by 2 lately.

If you’d ask most traders, hedge funds are viewed as unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the moguls of this group, close to 450 funds. Most estimates calculate that this group controls most of the smart money’s total asset base, and by keeping an eye on their best picks, we have spotted 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 annually 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 beaten the S&P 500 index by 24 percentage points in 7 months (see the details here).


Just as integral, positive insider trading sentiment is a second way to break down the world of equities. There are a number of reasons for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the key action regarding Conceptus, Inc. (NASDAQ:CPTS).

What does the smart money think about Conceptus, Inc. (NASDAQ:CPTS)?

At year’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of 29% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.

Of the funds we track, Deerfield Management, managed by James E. Flynn, holds the largest position in Conceptus, Inc. (NASDAQ:CPTS). Deerfield Management has a $10.9 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is William Leland Edwards of Palo Alto Investors, with a $9.4 million position; 1.1% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Kevin Kotler’s Broadfin Capital and D. E. Shaw’s D E Shaw.

As aggregate interest increased, specific money managers have been driving this bullishness. D E Shaw, managed by D. E. Shaw, assembled the biggest position in Conceptus, Inc. (NASDAQ:CPTS). D E Shaw had 0.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.6 million position during the quarter. The other funds with brand new CPTS positions are Steven Cohen’s SAC Capital Advisors and Ken Griffin’s Citadel Investment Group.

What do corporate executives and insiders think about Conceptus, Inc. (NASDAQ:CPTS)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, Conceptus, Inc. (NASDAQ:CPTS) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Conceptus, Inc. (NASDAQ:CPTS). These stocks are Endologix, Inc. (NASDAQ:ELGX), Luminex Corporation (NASDAQ:LMNX), ICU Medical, Incorporated (NASDAQ:ICUI), Cantel Medical Corp. (NYSE:CMN), and Tornier N.V. (NASDAQ:TRNX). This group of stocks belong to the medical instruments & supplies industry and their market caps match CPTS’s market cap.