In the eyes of many investors, hedge funds are perceived as bloated, outdated financial vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds with their doors open today, this site looks at the upper echelon of this club, around 525 funds. It is widely held that this group has its hands on most of all hedge funds’ total capital, and by tracking their highest performing equity investments, we’ve revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, positive insider trading sentiment is another way to look at the stock market universe. Just as you’d expect, there are a number of reasons for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this method if investors know what to do (learn more here).
Thus, we’re going to examine the latest info for The Medicines Company (NASDAQ:MDCO).
What have hedge funds been doing with The Medicines Company (NASDAQ:MDCO)?
At Q2’s end, a total of 20 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.
Out of the hedge funds we follow, Royce & Associates, managed by Chuck Royce, holds the biggest position in The Medicines Company (NASDAQ:MDCO). Royce & Associates has a $124.7 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Arthur B Cohen and Joseph Healey of Healthcor Management LP, with a $51.5 million position; 3.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Sean Cullinan’s Point State Capital, Roberto Mignone’s Bridger Management and Donald Chiboucis’s Columbus Circle Investors.
Since The Medicines Company (NASDAQ:MDCO) has faced a fall in interest from the top-tier hedge fund industry, logic holds that there lies a certain “tier” of funds that decided to sell off their positions entirely at the end of the second quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management sold off the largest stake of the 450+ funds we key on, comprising about $15.4 million in call options., and Arthur B Cohen and Joseph Healey of Healthcor Management LP was right behind this move, as the fund cut about $6.7 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in The Medicines Company (NASDAQ:MDCO)
Bullish insider trading is best served when the company in question has seen transactions within the past 180 days. Over the latest 180-day time frame, The Medicines Company (NASDAQ:MDCO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to The Medicines Company (NASDAQ:MDCO). These stocks are United Therapeutics Corporation (NASDAQ:UTHR), Cubist Pharmaceuticals Inc (NASDAQ:CBST), Amarin Corporation plc (ADR) (NASDAQ:AMRN), Taro Pharmaceutical Industries Ltd. (NYSE:TARO), and ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS). This group of stocks belong to the drug manufacturers – other industry and their market caps match MDCO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| United Therapeutics Corporation (NASDAQ:UTHR) | 16 | 0 | 0 |
| Cubist Pharmaceuticals Inc (NASDAQ:CBST) | 24 | 0 | 0 |
| Amarin Corporation plc (ADR) (NASDAQ:AMRN) | 15 | 0 | 0 |
| Taro Pharmaceutical Industries Ltd. (NYSE:TARO) | 9 | 0 | 0 |
| ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) | 13 | 0 | 0 |
Using the results explained by Insider Monkey’s analyses, regular investors must always track hedge fund and insider trading activity, and The Medicines Company (NASDAQ:MDCO) applies perfectly to this mantra.
