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Hedge Funds Are Selling BioMarin Pharmaceutical Inc. (BMRN)

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) was in 22 hedge funds’ portfolio at the end of the first quarter of 2013. BMRN has experienced a decrease in hedge fund interest lately. There were 25 hedge funds in our database with BMRN holdings at the end of the previous quarter.

According to most market participants, hedge funds are viewed as slow, old financial vehicles of the past. While there are more than 8000 funds in operation at the moment, we look at the masters of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total asset base, and by watching their highest performing equity investments, we have deciphered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, optimistic insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are many reasons for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the market-beating potential of this strategy if you know where to look (learn more here).

With all of this in mind, let’s take a gander at the latest action surrounding BioMarin Pharmaceutical Inc. (NASDAQ:BMRN).

What have hedge funds been doing with BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)?

At Q1’s end, a total of 22 of the hedge funds we track were long in this stock, a change of -12% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly.

Of the funds we track, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management had the most valuable position in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), worth close to $133.6 million, comprising 4.1% of its total 13F portfolio. On Sectoral Asset Management’s heels is John Griffin of Blue Ridge Capital, with a $109 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Steven Cohen’s SAC Capital Advisors, Ken Griffin’s Citadel Investment Group and Samuel Isaly’s OrbiMed Advisors.

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)Due to the fact that BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of money managers who sold off their entire stakes last quarter. Intriguingly, Charles Davidson’s Wexford Capital said goodbye to the biggest position of the 450+ funds we watch, totaling about $1.5 million in stock.. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dropped its stock, about $0.8 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds last quarter.

Insider trading activity in BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) has experienced 3 unique insiders buying, and 13 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 BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). These stocks are Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Seattle Genetics, Inc. (NASDAQ:SGEN), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX), and Illumina, Inc. (NASDAQ:ILMN). This group of stocks are in the biotechnology industry and their market caps are similar to BMRN’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Regeneron Pharmaceuticals Inc (NASDAQ:REGN) 22 0 18
Seattle Genetics, Inc. (NASDAQ:SGEN) 8 0 8
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) 22 0 7
Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) 29 0 13
Illumina, Inc. (NASDAQ:ILMN) 28 0 11

With the results shown by our research, everyday investors must always watch hedge fund and insider trading sentiment, and BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is no exception.

Click here to learn why you should track hedge funds

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