Hedge Funds Are Betting On AVEO Pharmaceuticals, Inc. (AVEO)

AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) shareholders have witnessed an increase in hedge fund interest recently.

To the average investor, there are plenty of indicators investors can use to monitor their holdings. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outpace the broader indices by a solid margin (see just how much).

Equally as important, positive insider trading activity is a second way to parse down the financial markets. There are many reasons for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).

With all of this in mind, we’re going to take a glance at the latest action encompassing AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO).

How are hedge funds trading AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)?

At the end of the fourth quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 40% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially.

Of the funds we track, Seth Klarman’s Baupost Group had the most valuable position in AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO), worth close to $39.5 million, accounting for 1.3% of its total 13F portfolio. On Baupost Group’s heels is Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, which held a $13.8 million position; 0.5% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Paul Tudor Jones’s Tudor Investment Corp.

As industrywide interest jumped, some big names have jumped into AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the largest position in AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO). Renaissance Technologies had 1.7 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.3 million position during the quarter. The only other fund with a brand new AVEO position is Cliff Asness’s AQR Capital Management.

What have insiders been doing with AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)?

Bullish insider trading is at its handiest when the company in question has seen transactions within the past half-year. Over the last 180-day time frame, AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) has experienced 4 unique insiders buying, and 6 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 AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO). These stocks are 3SBio Inc. (ADR) (NASDAQ:SSRX), Osiris Therapeutics, Inc. (NASDAQ:OSIR), Vical Incorporated (NASDAQ:VICL), Obagi Medical Products, Inc. (NASDAQ:OMPI), and Cambrex Corporation (NYSE:CBM). This group of stocks are the members of the biotechnology industry and their market caps are closest to AVEO’s market cap.

With the results exhibited by our time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) shareholders fit into this picture quite nicely.

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