Is Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX) a marvelous investment now? Investors who are in the know are becoming more confident. The number of long hedge fund bets went up by 4 in recent months.
If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated financial vehicles of the past. While there are over 8000 funds with their doors open today, we hone in on the upper echelon of this group, around 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total asset base, and by tracking their highest performing stock picks, we have come up with a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as key, optimistic insider trading sentiment is another way to parse down the investments you’re interested in. Just as you’d expect, there are plenty of reasons for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).
Consequently, it’s important to take a glance at the recent action encompassing Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX).
What does the smart money think about Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX)?
In preparation for this year, a total of 8 of the hedge funds we track were bullish in this stock, a change of 100% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.
Of the funds we track, RA Capital Management, managed by Peter Kolchinsky, holds the biggest position in Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX). RA Capital Management has a $5.9 million position in the stock, comprising 2.1% of its 13F portfolio. On RA Capital Management’s heels is Phill Gross and Robert Atchinson of Adage Capital Management, with a $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Cliff Asness’s AQR Capital Management, and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. RA Capital Management, managed by Peter Kolchinsky, created the most outsized position in Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX). RA Capital Management had 5.9 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management, and Jim Simons’s Renaissance Technologies.
Insider trading activity in Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX)
Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past half-year. Over the last 180-day time frame, Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX) has experienced 3 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 Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX). These stocks are Durata Therapeutics Inc (NASDAQ:DRTX), Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN), OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI), ShangPharma Corp (ADR) (NYSE:SHP), and Cempra Inc (NASDAQ:CEMP). This group of stocks are in the biotechnology industry and their market caps resemble CYTX’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Durata Therapeutics Inc (NASDAQ:DRTX) | 5 | 7 | 0 |
| Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN) | 10 | 0 | 0 |
| OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI) | 4 | 0 | 0 |
| ShangPharma Corp (ADR) (NYSE:SHP) | 6 | 0 | 0 |
| Cempra Inc (NASDAQ:CEMP) | 4 | 0 | 0 |
With the results demonstrated by Insider Monkey’s time-tested strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Cytori Therapeutics Inc. (USA) (NASDAQ:CYTX) applies perfectly to this mantra.
