The Medicines Company (NASDAQ:MDCO) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately.
According to most traders, hedge funds are seen as unimportant, outdated investment tools of years past. While there are over 8000 funds in operation at present, we at Insider Monkey choose to focus on the leaders of this group, about 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total capital, and by keeping an eye on their highest performing stock picks, we have determined a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as integral, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. Obviously, there are a variety of stimuli for an executive to cut shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
Keeping this in mind, we’re going to take a gander at the key action encompassing The Medicines Company (NASDAQ:MDCO).
How have hedgies been trading The Medicines Company (NASDAQ:MDCO)?
Heading into 2013, a total of 19 of the hedge funds we track were long in this stock, a change of 27% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.
According to our comprehensive database, SAC Capital Advisors, managed by Steven Cohen, holds the largest position in The Medicines Company (NASDAQ:MDCO). SAC Capital Advisors has a $84 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $50 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Chuck Royce’s Royce & Associates, Sean Cullinan’s Point State Capital and James E. Flynn’s Deerfield Management.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in The Medicines Company (NASDAQ:MDCO). Balyasny Asset Management had 11 million invested in the company at the end of the quarter. SAC Subsidiary’s Sigma Capital Management also made a $6 million investment in the stock during the quarter. The other funds with brand new MDCO positions are Charles Davidson’s Wexford Capital, John Burbank’s Passport Capital, and SAC Subsidiary’s CR Intrinsic Investors.
What have insiders been doing with The Medicines Company (NASDAQ:MDCO)?
Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time period, The Medicines Company (NASDAQ:MDCO) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
With the returns exhibited by our strategies, retail investors must always monitor hedge fund and insider trading sentiment, and The Medicines Company (NASDAQ:MDCO) shareholders fit into this picture quite nicely.
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