WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX) shareholders have witnessed an increase in enthusiasm from smart money of late.
To the average investor, there are plenty of gauges shareholders can use to analyze their holdings. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat their index-focused peers by a very impressive amount (see just how much).
Just as key, bullish insider trading sentiment is another way to break down the financial markets. Obviously, there are a number of stimuli for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).
Now, we’re going to take a look at the key action regarding WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX).
What have hedge funds been doing with WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX)?
At year’s end, a total of 12 of the hedge funds we track were long in this stock, a change of 33% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Julian Robertson’s Tiger Management had the biggest position in WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX), worth close to $18 million, comprising 3.2% of its total 13F portfolio. On Tiger Management’s heels is D. E. Shaw of D E Shaw, with a $4 million position; the fund has 0% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Mario Gabelli’s GAMCO Investors, Jacob Gottlieb’s Visium Asset Management and Jim Simons’s Renaissance Technologies.
As one would reasonably expect, specific money managers were breaking ground themselves. Highland Capital Management, managed by James Dondero, assembled the biggest position in WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX). Highland Capital Management had 1 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0 million position during the quarter. The only other fund with a brand new WX position is Bruce Kovner’s Caxton Associates LP.
How are insiders trading WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time period, WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX) has seen zero unique insiders buying, and zero 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 WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX). These stocks are Bio-Reference Laboratories Inc (NASDAQ:BRLI), Alere Inc (NYSE:ALR), Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), ICON plc – Ordinary Shares (NASDAQ:ICLR), and Genomic Health, Inc. (NASDAQ:GHDX). All of these stocks are in the medical laboratories & research industry and their market caps are similar to WX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Bio-Reference Laboratories Inc (NASDAQ:BRLI)||10||0||2|
|Alere Inc (NYSE:ALR)||24||0||3|
|Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)||11||0||3|
|ICON plc – Ordinary Shares (NASDAQ:ICLR)||16||0||0|
|Genomic Health, Inc. (NASDAQ:GHDX)||13||2||8|
With the results exhibited by the aforementioned time-tested strategies, everyday investors must always monitor hedge fund and insider trading sentiment, and WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX) applies perfectly to this mantra.