Now, according to many market players, hedge funds are viewed as bloated, outdated investment tools of a forgotten age. Although there are over 8,000 hedge funds trading currently, Insider Monkey aim at the top tier of this club, about 525 funds. It is widely held that this group has its hands on the lion’s share of the hedge fund industry’s total assets, and by tracking their best equity investments, we’ve found a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as useful, bullish insider trading sentiment is another way to analyze the marketplace. There are plenty of stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
What’s more, it’s important to examine the newest info surrounding Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI).
How have hedgies been trading Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)?
Heading into Q3, a total of 9 of the hedge funds we track were bullish in this stock, a change of -25% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially.
According to our 13F database, Israel Englander’s Millennium Management had the largest position in Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), worth close to $15.1 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Sean Cullinan’s Point State Capital, William Leland Edwards’s Palo Alto Investors and Dmitry Balyasny’s Balyasny Asset Management.
Judging by the fact that Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has faced declining interest from the top-tier hedge fund industry, it’s safe to say that there lies a certain “tier” of funds who sold off their positions entirely last quarter. Intriguingly, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital dropped the biggest investment of the “upper crust” of funds we key on, totaling about $4.7 million in stock, and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.6 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 3 funds last quarter.
How have insiders been trading Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) 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 Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI). These stocks are Emergent Biosolutions Inc (NYSE:EBS), Sequenom, Inc. (NASDAQ:SQNM), Idenix Pharmaceuticals Inc (NASDAQ:IDIX), Dyax Corp. (NASDAQ:DYAX), and QLT Inc. (USA) (NASDAQ:QLTI). This group of stocks are in the biotechnology industry and their market caps are similar to SPPI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Emergent Biosolutions Inc (NYSE:EBS) | 14 | 0 | 0 |
| Sequenom, Inc. (NASDAQ:SQNM) | 16 | 0 | 0 |
| Idenix Pharmaceuticals Inc (NASDAQ:IDIX) | 16 | 0 | 0 |
| Dyax Corp. (NASDAQ:DYAX) | 15 | 0 | 0 |
| QLT Inc. (USA) (NASDAQ:QLTI) | 16 | 0 | 0 |
Using the results shown by our studies, regular investors should always watch hedge fund and insider trading sentiment, and Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) shareholders fit into this picture quite nicely.
