Hedge Funds Are Betting On Gilead Sciences, Inc. (GILD)

Is Gilead Sciences, Inc. (NASDAQ:GILD) undervalued? Prominent investors are becoming more confident. The number of bullish hedge fund bets moved up by 10 lately.

To the average investor, there are a multitude of indicators market participants can use to watch stocks. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can trounce the market by a healthy margin (see just how much).

Equally as integral, bullish insider trading activity is a second way to break down the investments you’re interested in. Obviously, there are a variety of reasons for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action surrounding Gilead Sciences, Inc. (NASDAQ:GILD).

What have hedge funds been doing with Gilead Sciences, Inc. (NASDAQ:GILD)?

Heading into Q2, a total of 63 of the hedge funds we track were long in this stock, a change of 19% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Jacob Gottlieb’s Visium Asset Management had the largest position in Gilead Sciences, Inc. (NASDAQ:GILD), worth close to $460.8 million, accounting for 11.9% of its total 13F portfolio. Coming in second is John Griffin of Blue Ridge Capital, with a $391.5 million position; the fund has 4.9% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Donald Chiboucis’s Columbus Circle Investors and Samuel Isaly’s OrbiMed Advisors.

With a general bullishness amongst the heavyweights, specific money managers have jumped into Gilead Sciences, Inc. (NASDAQ:GILD) headfirst. Brookside Capital, managed by Bain Capital, initiated the most valuable position in Gilead Sciences, Inc. (NASDAQ:GILD). Brookside Capital had 150.1 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also made a $46.2 million investment in the stock during the quarter. The following funds were also among the new GILD investors: Stanley Druckenmiller’s Duquesne Capital, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Dmitry Balyasny’s Balyasny Asset Management.

Insider trading activity in Gilead Sciences, Inc. (NASDAQ:GILD)

Insider buying is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, Gilead Sciences, Inc. (NASDAQ:GILD) has seen 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Gilead Sciences, Inc. (NASDAQ:GILD). These stocks are Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), Biogen Idec Inc. (NASDAQ:BIIB), Celgene Corporation (NASDAQ:CELG), and Amgen, Inc. (NASDAQ:AMGN). This group of stocks are the members of the biotechnology industry and their market caps resemble GILD’s market cap.

With the returns demonstrated by our studies, retail investors must always watch hedge fund and insider trading sentiment, and Gilead Sciences, Inc. (NASDAQ:GILD) shareholders fit into this picture quite nicely.

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