Hedge Funds Are Dumping Dendreon Corporation (DNDN)

What’s a smart Dendreon Corporation (NASDAQ:DNDN) investor to do?

To the average investor, there are tons of methods shareholders can use to monitor the equity markets. 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 investment managers can outperform the S&P 500 by a superb amount (see just how much).

Just as necessary, bullish insider trading sentiment is another way to analyze the investments you’re interested in. There are a variety of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if “monkeys” know what to do (learn more here).

Furthermore, let’s discuss the newest info surrounding Dendreon Corporation (NASDAQ:DNDN).

What have hedge funds been doing with Dendreon Corporation (NASDAQ:DNDN)?

In preparation for the third quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -15% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.

When using filings from the hedgies we track, Discovery Capital Management, managed by Rob Citrone, holds the biggest position in Dendreon Corporation (NASDAQ:DNDN). Discovery Capital Management has a $24.4 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by OrbiMed Advisors, managed by Samuel Isaly, which held a $16.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Steven Cohen’s SAC Capital Advisors, Matt Sirovich and Jeremy Mindich’s Scopia Capital and Samuel Isaly’s OrbiMed Advisors.

Because Dendreon Corporation (NASDAQ:DNDN) has faced declining interest from the smart money’s best and brightest, we can see that there lies a certain “tier” of funds that elected to cut their positions entirely in Q1. Interestingly, Stephen DuBois’s Camber Capital Management cut the biggest position of all the hedgies we track, valued at about $11.8 million in stock. Sanford J. Colen’s fund, Apex Capital, also cut its stock, about $5.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in Q1.

How are insiders trading Dendreon Corporation (NASDAQ:DNDN)?

Insider buying made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time period, Dendreon Corporation (NASDAQ:DNDN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Dendreon Corporation (NASDAQ:DNDN). These stocks are Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), TESARO Inc (NASDAQ:TSRO), Clovis Oncology Inc (NASDAQ:CLVS), China Biologic Products Inc (NASDAQ:CBPO), and InterMune Inc (NASDAQ:ITMN). This group of stocks are the members of the biotechnology industry and their market caps are closest to DNDN’s market cap.