Hedge Funds Are Crazy About Aegerion Pharmaceuticals, Inc. (AEGR)

Is Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) a good stock to buy now? Hedge funds are getting more bullish. The number of long hedge fund bets improved by 6 lately.

According to most market participants, hedge funds are assumed to be underperforming, outdated financial tools of the past. While there are more than 8000 funds trading at present, we look at the bigwigs of this group, around 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total asset base, and by tracking their highest performing equity investments, we have identified a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as integral, positive insider trading sentiment is a second way to parse down the financial markets. There are many reasons for an executive to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).

With all of this in mind, it’s important to take a peek at the latest action encompassing Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR).

Hedge fund activity in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)

At the end of the first quarter, a total of 20 of the hedge funds we track held long positions in this stock, a change of 43% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, Joseph Edelman’s Perceptive Advisors had the most valuable position in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR), worth close to $136.1 million, accounting for 16.4% of its total 13F portfolio. Coming in second is Julian Baker and Felix Baker of Baker Bros. Advisors, with a $34.8 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Mark Kingdon’s Kingdon Capital, and Mark Broach’s Manatuck Hill Partners.

As one would reasonably expect, key hedge funds were leading the bulls’ herd. Perceptive Advisors, managed by Joseph Edelman, initiated the most outsized call position in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR). Perceptive Advisors had 8.1 million invested in the company at the end of the quarter. Christopher Medlock James’s Partner Fund Management also made a $7 million investment in the stock during the quarter. The following funds were also among the new AEGR investors: Joe DiMenna’s ZWEIG DIMENNA PARTNERS, Scott Burney’s Bluefin Investment Management, and Drew Cupps’s Cupps Capital Management.

Insider trading activity in Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)

Insider buying is most useful when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) has experienced 3 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR). These stocks are Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Pacira Pharmaceuticals Inc (NASDAQ:PCRX), and Impax Laboratories Inc (NASDAQ:IPXL). This group of stocks are the members of the drug manufacturers – major industry and their market caps resemble AEGR’s market cap.