Is AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) a good investment today? Investors who are in the know are taking a pessimistic view. The number of bullish hedge fund bets dropped by 1 in recent months.
If you’d ask most investors, hedge funds are seen as worthless, outdated investment vehicles of years past. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the upper echelon of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by tracking their top equity investments, we have found a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 24 percentage points in 7 months (see the details here).
Equally as key, positive insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are many incentives for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Consequently, we’re going to take a peek at the recent action regarding AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG).
How have hedgies been trading AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)?
At year’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of -10% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.
According to our comprehensive database, Phill Gross and Robert Atchinson’s Adage Capital Management had the largest position in AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), worth close to $60.8 million, comprising 0.2% of its total 13F portfolio. On Adage Capital Management’s heels is William Leland Edwards of Palo Alto Investors, with a $26.7 million position; 3.1% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.
Seeing as AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) has experienced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that slashed their positions entirely in Q4. At the top of the heap, Richard Schimel’s Diamondback Capital said goodbye to the biggest investment of the 450+ funds we key on, worth about $2.5 million in stock., and Jacob Gottlieb of Visium Asset Management was right behind this move, as the fund dropped about $1.6 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds in Q4.
What have insiders been doing with AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past 180 days. Over the last 180-day time frame, AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) 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 AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG). These stocks are Quidel Corporation (NASDAQ:QDEL), Trinity Biotech plc (ADR) (NASDAQ:TRIB), SurModics, Inc. (NASDAQ:SRDX), and Synta Pharmaceuticals Corp. (NASDAQ:SNTA). All of these stocks are in the diagnostic substances industry and their market caps are similar to AMAG’s market cap.