Should smart Orexigen Therapeutics, Inc. (NASDAQ:OREX) keep in mind the following data?
In the financial world, there are a multitude of metrics shareholders can use to watch their holdings. A couple of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outclass the market by a very impressive amount (see just how much).
Just as key, optimistic insider trading activity is a second way to analyze the marketplace. There are a variety of motivations for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).
Thus, we’re going to examine the newest info about Orexigen Therapeutics, Inc. (NASDAQ:OREX).
How are hedge funds trading Orexigen Therapeutics, Inc. (NASDAQ:OREX)?
At Q2’s end, a total of 22 of the hedge funds we track were bullish in this stock, a change of -4% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.
Out of the hedge funds we follow, Partner Fund Management, managed by Christopher Medlock James, holds the most valuable position in Orexigen Therapeutics, Inc. (NASDAQ:OREX). Partner Fund Management has a $21.3 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Jacob Gottlieb of Visium Asset Management, with a $9.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers with similar optimism include D. E. Shaw’s D E Shaw, Jeremy Green’s Redmile Group and Donald Chiboucis’s Columbus Circle Investors.
Judging by the fact that Orexigen Therapeutics, Inc. (NASDAQ:OREX) has faced declining interest from upper-tier hedge fund managers, it’s safe to say that there was a specific group of hedge funds who sold off their positions entirely last quarter. It’s worth mentioning that Charles Davidson’s Wexford Capital dropped the biggest position of the 450+ funds we monitor, totaling an estimated $0.6 million in stock, and Mike Vranos of Ellington was right behind this move, as the fund said goodbye to about $0.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds last quarter.
How have insiders been trading Orexigen Therapeutics, Inc. (NASDAQ:OREX)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past six months. Over the last six-month time frame, Orexigen Therapeutics, Inc. (NASDAQ:OREX) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Orexigen Therapeutics, Inc. (NASDAQ:OREX). These stocks are Amarin Corporation plc (ADR) (NASDAQ:AMRN), Depomed Inc (NASDAQ:DEPO), Dynavax Technologies Corporation (NASDAQ:DVAX), Synergy Pharmaceuticals Inc (NASDAQ:SGYP), and Simcere Pharmaceutical Group (ADR) (NYSE:SCR). All of these stocks are in the drug manufacturers – other industry and their market caps match OREX’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Amarin Corporation plc (ADR) (NASDAQ:AMRN) | 15 | 0 | 0 |
| Depomed Inc (NASDAQ:DEPO) | 9 | 0 | 0 |
| Dynavax Technologies Corporation (NASDAQ:DVAX) | 12 | 0 | 0 |
| Synergy Pharmaceuticals Inc (NASDAQ:SGYP) | 9 | 0 | 0 |
| Simcere Pharmaceutical Group (ADR) (NYSE:SCR) | 3 | 0 | 0 |
Using the returns shown by the previously mentioned tactics, average investors must always track hedge fund and insider trading sentiment, and Orexigen Therapeutics, Inc. (NASDAQ:OREX) applies perfectly to this mantra.
