Hedge Funds Are Betting On Rigel Pharmaceuticals, Inc. (RIGL)

Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) investors should pay attention to an increase in hedge fund interest in recent months.

According to most shareholders, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the bigwigs of this group, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by monitoring their best stock picks, we have discovered a number of investment strategies that have historically outstripped the market. 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as important, optimistic insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a number of motivations for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this method if you know where to look (learn more here).

With all of this in mind, we’re going to take a gander at the recent action encompassing Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL).

Hedge fund activity in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)

At Q1’s end, a total of 17 of the hedge funds we track were bullish in this stock, a change of 13% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, William Leland Edwards’s Palo Alto Investors had the biggest position in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), worth close to $19.8 million, comprising 2.3% of its total 13F portfolio. On Palo Alto Investors’s heels is Deerfield Management, managed by James E. Flynn, which held a $12.9 million position; 0.8% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Israel Englander’s Millennium Management, Kevin Kotler’s Broadfin Capital and Chuck Royce’s Royce & Associates.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the most valuable call position in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). Balyasny Asset Management had 4.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $3.2 million investment in the stock during the quarter. The other funds with brand new RIGL positions are Samuel Isaly’s OrbiMed Advisors and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Insider trading activity in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)

Insider trading activity, especially when it’s bullish, is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). These stocks are Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Kythera Biopharmaceuticals Inc (NASDAQ:KYTH), Endocyte, Inc. (NASDAQ:ECYT), Intercept Pharmaceuticals Inc (NASDAQ:ICPT), and Keryx Biopharmaceuticals (NASDAQ:KERX). This group of stocks are the members of the drug manufacturers – major industry and their market caps are similar to RIGL’s market cap.