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Exelixis, Inc. (NASDAQ:EXEL): Are Hedge Funds Right About This Stock?: Clovis Oncology Inc (CLVS), Puma Biotechnology Inc (PBYI)

Exelixis, Inc. (NASDAQ:EXEL) was in 10 hedge funds’ portfolio at the end of December. EXEL shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 11 hedge funds in our database with EXEL holdings at the end of the previous quarter.

Exelixis, Inc. (NASDAQ:EXEL)

In the eyes of most market participants, hedge funds are viewed as underperforming, old financial vehicles of yesteryear. While there are more than 8000 funds trading at present, we look at the aristocrats of this club, around 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by keeping an eye on their best stock picks, we have come up with a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as beneficial, bullish insider trading activity is another way to parse down the marketplace. There are a variety of incentives for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).

Now, we’re going to take a gander at the recent action regarding Exelixis, Inc. (NASDAQ:EXEL).

How are hedge funds trading Exelixis, Inc. (NASDAQ:EXEL)?

In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from the third quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the biggest position in Exelixis, Inc. (NASDAQ:EXEL). First Eagle Investment Management has a $5 million position in the stock, comprising 0% of its 13F portfolio. On First Eagle Investment Management’s heels is Philippe Jabre of Jabre Capital Partners, with a $4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Steven Cohen’s SAC Capital Advisors, D. E. Shaw’s D E Shaw and SAC Subsidiary’s Sigma Capital Management.

Seeing as Exelixis, Inc. (NASDAQ:EXEL) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds that decided to sell off their entire stakes last quarter. At the top of the heap, Bart Baum’s Ionic Capital Management dropped the biggest investment of the 450+ funds we key on, totaling close to $1 million in stock., and Julian Baker and Felix Baker of Baker Bros. Advisors was right behind this move, as the fund said goodbye to about $0 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds last quarter.

How have insiders been trading Exelixis, Inc. (NASDAQ:EXEL)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time frame, Exelixis, Inc. (NASDAQ:EXEL) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Exelixis, Inc. (NASDAQ:EXEL). These stocks are Clovis Oncology Inc (NASDAQ:CLVS), Puma Biotechnology Inc (NYSE:PBYI), Celldex Therapeutics, Inc. (NASDAQ:CLDX), NPS Pharmaceuticals, Inc. (NASDAQ:NPSP), and Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN). All of these stocks are in the biotechnology industry and their market caps are similar to EXEL’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Clovis Oncology Inc (NASDAQ:CLVS) 7 0 1
Puma Biotechnology Inc (NYSE:PBYI) 11 2 0
Celldex Therapeutics, Inc. (NASDAQ:CLDX) 12 0 0
NPS Pharmaceuticals, Inc. (NASDAQ:NPSP) 18 1 6
Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) 16 0 1

With the results shown by the aforementioned strategies, retail investors must always watch hedge fund and insider trading sentiment, and Exelixis, Inc. (NASDAQ:EXEL) applies perfectly to this mantra.

Click here to learn why you should track hedge funds

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