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Hedge Funds Are Buying ACADIA Pharmaceuticals Inc. (ACAD)

Is it smart to be bullish on ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)?

In the eyes of many of your fellow readers, hedge funds are viewed as overrated, outdated financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds with their doors open today, this site aim at the upper echelon of this club, about 525 funds. It is widely held that this group has its hands on the majority of the smart money’s total capital, and by tracking their best stock picks, we’ve discovered a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped 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 33 percentage points in 11 months (find the details here).

Equally as key, optimistic insider trading sentiment is another way to look at the marketplace. There are lots of motivations for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if investors know where to look (learn more here).

Keeping this in mind, we’re going to discuss the recent info about ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD).

How have hedgies been trading ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)?

At the end of the second quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 50% from the first quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully.

ACADIA Pharmaceuticals Inc. (ACAD)When using filings from the hedgies we track, Julian Baker and Felix Baker’s Baker Bros. Advisors had the most valuable position in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), worth close to $362.2 million, comprising 7.2% of its total 13F portfolio. The second largest stake is held by RA Capital Management, managed by Peter Kolchinsky, which held a $118.5 million position; 15.7% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Peter Kolchinsky’s RA Capital Management, Jacob Gottlieb’s Visium Asset Management and Samuel Isaly’s OrbiMed Advisors.

With a general bullishness amongst the titans, specific money managers were breaking ground themselves. Baker Bros. Advisors, managed by Julian Baker and Felix Baker, established the biggest position in ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). Baker Bros. Advisors had 362.2 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also initiated a $118.5 million position during the quarter. The other funds with brand new ACAD positions are Peter Kolchinsky’s RA Capital Management, Jacob Gottlieb’s Visium Asset Management, and Samuel Isaly’s OrbiMed Advisors.

What do corporate executives and insiders think about ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)?

Insider buying is at its handiest when the company in focus has seen transactions within the past six months. Over the latest half-year time frame, ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). These stocks are Array Biopharma Inc (NASDAQ:ARRY), Cadence Pharmaceuticals, Inc. (NASDAQ:CADX), Merrimack Pharmaceuticals Inc (NASDAQ:MACK), Halozyme Therapeutics, Inc. (NASDAQ:HALO), and EXACT Sciences Corporation (NASDAQ:EXAS). This group of stocks belong to the biotechnology industry and their market caps resemble ACAD’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Array Biopharma Inc (NASDAQ:ARRY) 17 0 0
Cadence Pharmaceuticals, Inc. (NASDAQ:CADX) 6 0 0
Merrimack Pharmaceuticals Inc (NASDAQ:MACK) 8 0 0
Halozyme Therapeutics, Inc. (NASDAQ:HALO) 11 0 0
EXACT Sciences Corporation (NASDAQ:EXAS) 10 0 0

Using the returns explained by the previously mentioned analyses, regular investors must always watch hedge fund and insider trading activity, and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shareholders fit into this picture quite nicely.

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