Questcor Pharmaceuticals Inc (NASDAQ:QCOR) was in 26 hedge funds’ portfolio at the end of March. QCOR has experienced a decrease in support from the world’s most elite money managers recently. There were 26 hedge funds in our database with QCOR holdings at the end of the previous quarter.
To most market participants, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are greater than 8000 funds trading today, we choose to focus on the top tier of this group, about 450 funds. It is estimated that this group controls the majority of all hedge funds’ total asset base, and by tracking their best investments, we have uncovered a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, positive insider trading activity is another way to parse down the world of equities. There are many motivations for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).
Now, let’s take a gander at the latest action encompassing Questcor Pharmaceuticals Inc (NASDAQ:QCOR).
How have hedgies been trading Questcor Pharmaceuticals Inc (NASDAQ:QCOR)?
At the end of the first quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Broadwood Capital, managed by Neal C. Bradsher, holds the largest position in Questcor Pharmaceuticals Inc (NASDAQ:QCOR). Broadwood Capital has a $116.5 million position in the stock, comprising 33.9% of its 13F portfolio. Sitting at the No. 2 spot is Bernard Horn of Polaris Capital Management, with a $52.4 million position; 3.1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include William Leland Edwards’s Palo Alto Investors, Phill Gross and Robert Atchinson’s Adage Capital Management and Jim Simons’s Renaissance Technologies.
Since Questcor Pharmaceuticals Inc (NASDAQ:QCOR) has faced falling interest from hedge fund managers, we can see that there lies a certain “tier” of money managers that elected to cut their positions entirely heading into Q2. It’s worth mentioning that James E. Flynn’s Deerfield Management dropped the largest position of all the hedgies we monitor, valued at close to $132.3 million in stock.. Rob Butts and Josh Clark’s fund, Southpoint Capital Advisors, also dropped its stock, about $14 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Questcor Pharmaceuticals Inc (NASDAQ:QCOR)?
Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past six months. Over the last half-year time frame, Questcor Pharmaceuticals Inc (NASDAQ:QCOR) has experienced zero unique insiders buying, and 2 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 Questcor Pharmaceuticals Inc (NASDAQ:QCOR). These stocks are Theravance Inc (NASDAQ:THRX), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), Viropharma Inc (NASDAQ:VPHM), Charles River Laboratories (NYSE:CRL), and Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). This group of stocks belong to the biotechnology industry and their market caps are similar to QCOR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Theravance Inc (NASDAQ:THRX)||17||1||4|
|Infinity Pharmaceuticals Inc. (NASDAQ:INFI)||22||0||4|
|Viropharma Inc (NASDAQ:VPHM)||16||1||4|
|Charles River Laboratories (NYSE:CRL)||21||0||8|
|Arena Pharmaceuticals, Inc. (NASDAQ:ARNA)||13||0||2|
With the returns shown by the aforementioned research, everyday investors must always pay attention to hedge fund and insider trading activity, and Questcor Pharmaceuticals Inc (NASDAQ:QCOR) shareholders fit into this picture quite nicely.