Is Array Biopharma Inc (NASDAQ:ARRY) a worthy stock to buy now? Investors who are in the know are buying. The number of bullish hedge fund bets advanced by 3 recently.
If you’d ask most shareholders, hedge funds are seen as slow, old investment vehicles of the past. While there are more than 8000 funds with their doors open at present, we look at the top tier of this group, about 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by watching their top investments, we have identified a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as beneficial, positive insider trading sentiment is another way to parse down the investments you’re interested in. Obviously, there are many reasons for an executive to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the recent action encompassing Array Biopharma Inc (NASDAQ:ARRY).
Hedge fund activity in Array Biopharma Inc (NASDAQ:ARRY)
At Q1’s end, a total of 20 of the hedge funds we track were long in this stock, a change of 18% from the first quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, James E. Flynn’s Deerfield Management had the biggest position in Array Biopharma Inc (NASDAQ:ARRY), worth close to $55.2 million, comprising 3.3% of its total 13F portfolio. On Deerfield Management’s heels is OrbiMed Advisors, managed by Samuel Isaly, which held a $23.5 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jeremy Green’s Redmile Group, Daniel Gold’s QVT Financial and Thomas E. Claugus’s GMT Capital.
Now, specific money managers have jumped into Array Biopharma Inc (NASDAQ:ARRY) headfirst. CR Intrinsic Investors, managed by SAC Subsidiary, established the most outsized position in Array Biopharma Inc (NASDAQ:ARRY). CR Intrinsic Investors had 0.3 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $0.2 million position during the quarter. The other funds with brand new ARRY positions are Glenn Russell Dubin’s Highbridge Capital Management, Steven Cohen’s SAC Capital Advisors, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Insider trading activity in Array Biopharma Inc (NASDAQ:ARRY)
Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the last six-month time period, Array Biopharma Inc (NASDAQ:ARRY) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Array Biopharma Inc (NASDAQ:ARRY). These stocks are EXACT Sciences Corporation (NASDAQ:EXAS), ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Merrimack Pharmaceuticals Inc (NASDAQ:MACK), Optimer Pharmaceuticals, Inc. (NASDAQ:OPTR), and Cadence Pharmaceuticals, Inc. (NASDAQ:CADX). All of these stocks are in the biotechnology industry and their market caps resemble ARRY’s market cap.