Is Discovery Laboratories, Inc. (NASDAQ:DSCO) a healthy stock for your portfolio? Investors who are in the know are getting less optimistic. The number of long hedge fund positions dropped by 3 lately.
In the 21st century investor’s toolkit, there are dozens of gauges market participants can use to track the equity markets. A pair of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outperform their index-focused peers by a healthy margin (see just how much).
Just as beneficial, bullish insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are a variety of motivations for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).
With all of this in mind, we’re going to take a look at the recent action encompassing Discovery Laboratories, Inc. (NASDAQ:DSCO).
Hedge fund activity in Discovery Laboratories, Inc. (NASDAQ:DSCO)
At the end of the first quarter, a total of 4 of the hedge funds we track were long in this stock, a change of -43% from the first quarter.
Since Discovery Laboratories, Inc. (NASDAQ:DSCO) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of money managers that slashed their full holdings last quarter. Interestingly, Richard Driehaus’s Driehaus Capital cut the biggest stake of the “upper crust” of funds we watch, worth about $1.1 million in stock., and Anand Parekh of Alyeska Investment Group was right behind this move, as the fund said goodbye to about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.
What do corporate executives and insiders think about Discovery Laboratories, Inc. (NASDAQ:DSCO)?
Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Discovery Laboratories, Inc. (NASDAQ:DSCO) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and Discovery Laboratories, Inc. (NASDAQ:DSCO) is no exception.