Hedge Funds Are Crazy About Novavax, Inc. (NVAX): Obagi Medical Products, Inc. (OMPI), Vical Incorporated (VICL)

Novavax, Inc. (NASDAQ:NVAX) was in 5 hedge funds’ portfolio at the end of December. NVAX investors should pay attention to an increase in hedge fund interest of late. There were 4 hedge funds in our database with NVAX positions at the end of the previous quarter.

Peter Kolchinsky

In today’s marketplace, there are a multitude of indicators market participants can use to analyze the equity markets. A duo of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can beat the market by a superb margin (see just how much).

Just as integral, bullish insider trading activity is another way to break down the marketplace. As the old adage goes: there are a variety of incentives for an executive to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the latest action surrounding Novavax, Inc. (NASDAQ:NVAX).

How are hedge funds trading Novavax, Inc. (NASDAQ:NVAX)?

Heading into 2013, a total of 5 of the hedge funds we track held long positions in this stock, a change of 25% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings substantially.

Of the funds we track, Peter Kolchinsky’s RA Capital Management had the largest position in Novavax, Inc. (NASDAQ:NVAX), worth close to $27.2 million, comprising 9.6% of its total 13F portfolio. On RA Capital Management’s heels is Jay Venkatesen of Ayer Capital Management, with a $5.2 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include D. E. Shaw’s D E Shaw, and Glenn Russell Dubin’s Highbridge Capital Management.

Now, key hedge funds have jumped into Novavax, Inc. (NASDAQ:NVAX) headfirst. Ayer Capital Management, managed by Jay Venkatesen, created the largest position in Novavax, Inc. (NASDAQ:NVAX). Ayer Capital Management had 5.2 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also made a $0.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Glenn Russell Dubin’s Highbridge Capital Management.

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

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

Let’s also review hedge fund and insider activity in other stocks similar to Novavax, Inc. (NASDAQ:NVAX). These stocks are Obagi Medical Products, Inc. (NASDAQ:OMPI), Vical Incorporated (NASDAQ:VICL), Osiris Therapeutics, Inc. (NASDAQ:OSIR), 3SBio Inc. (ADR) (NASDAQ:SSRX), and XenoPort, Inc. (NASDAQ:XNPT). All of these stocks are in the biotechnology industry and their market caps are closest to NVAX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Obagi Medical Products, Inc. (NASDAQ:OMPI) 7 0 0
Vical Incorporated (NASDAQ:VICL) 8 5 0
Osiris Therapeutics, Inc. (NASDAQ:OSIR) 1 1 3
3SBio Inc. (ADR) (NASDAQ:SSRX) 9 0 0
XenoPort, Inc. (NASDAQ:XNPT) 13 0 0

With the returns demonstrated by Insider Monkey’s studies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Novavax, Inc. (NASDAQ:NVAX) is an important part of this process.

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