In an effort to generate funds for clinical research and development and other general corporate purposes, Anthera Pharmaceuticals Inc (NASDAQ:ANTH) announced earlier today that it is planning to sell shares of common stock in an underwritten public offering. Anthera Pharmaceuticals Inc (NASDAQ:ANTH) is planning to offer these shares at $7.50 per share, and is expecting to generate around $25 million from the proceeds, before deducting discounts, commissions and other expenses related to the offering. Anthera Pharmaceuticals Inc (NASDAQ:ANTH) stock is soaring this year to say the least, as it has gained more than 385% year-to-date (yes, that is not a typo), even factoring in today’s drop of around 8% following the announcement of the underwritten public offering. The offering is a necessary move, as the company lost $7.7 million in the first quarter through its operations. It currently has no products on the market, with the biotech firm’s lead candidate being the lupus treatment blisibimod.
Looking at the hedge fund activity on Anthera Pharmaceuticals Inc (NASDAQ:ANTH), we can see there is optimism for the company’s product candidates, as there were nine hedge funds with $26.1 million in shares of the company at the end of March, up from seven hedge funds with $9.1 million in holdings in the stock at the end of 2014. However, given that the stock jumped by 183% and hedge funds’ resulting holdings were up by 186%, we can see that there wasn’t much of an increase in overall share ownership, even as two more funds bought into the stock.
Most investors don’t understand hedge funds and indicators that are based on hedge fund and insider activity. They ignore hedge funds because of their recent poor performance in the long-running bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns enjoyed (or not) by investors. We uncovered through extensive research that hedge funds’ long positions in small-cap stocks actually greatly outperformed the market from 1999 to 2012, and built a system around this. The 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 80 percentage points since the end of August 2012 when this system went live, returning a cumulative 135% vs. less than 55% for the S&P 500 Index (read the details).
Likewise, other research (not our own) has shown insider purchases are also effective piggybacking methods for investors. That’s why we believe investors should pay attention to what hedge funds and insiders are buying and keep them apprised of this information. However there was no insider activity in Anthera Pharmaceuticals Inc (NASDAQ:ANTH) during the first half of 2015.
Keeping this in mind, let’s take a look at the latest hedge fund activity regarding Anthera Pharmaceuticals Inc (NASDAQ:ANTH).