Hedge Funds Are Selling BioDelivery Sciences International, Inc. (BDSI)

Is BioDelivery Sciences International, Inc. (NASDAQ:BDSI) a good investment?

At the moment, there are many indicators market participants can use to watch their holdings. Two of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can outpace the market by a very impressive margin (see just how much).

Equally as key, optimistic insider trading activity is another way to analyze the world of equities. Obviously, there are a number of reasons for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).

Keeping this in mind, let’s study the newest info about BioDelivery Sciences International, Inc. (NASDAQ:BDSI).

What does the smart money think about BioDelivery Sciences International, Inc. (NASDAQ:BDSI)?

Heading into Q3, a total of 8 of the hedge funds we track held long positions in this stock, a change of -11% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.

According to our 13F database, James E. Flynn’s Deerfield Management had the most valuable position in BioDelivery Sciences International, Inc. (NASDAQ:BDSI), worth close to $10.6 million, accounting for 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $9.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Kevin Kotler’s Broadfin Capital, Benjamin J Taylor’s Sophrosyne Capital and Julian Baker and Felix Baker’s Baker Bros. Advisors.

Judging by the fact that BioDelivery Sciences International, Inc. (NASDAQ:BDSI) has experienced a fall in interest from the top-tier hedge fund industry, logic holds that there is a sect of funds that slashed their positions entirely at the end of the second quarter. At the top of the heap, Jim Simons’s Renaissance Technologies cut the largest investment of the 450+ funds we key on, totaling about $0.7 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $0.1 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds at the end of the second quarter.

What do corporate executives and insiders think about BioDelivery Sciences International, Inc. (NASDAQ:BDSI)?

Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, BioDelivery Sciences International, Inc. (NASDAQ:BDSI) 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 BioDelivery Sciences International, Inc. (NASDAQ:BDSI). These stocks are Cytokinetics, Inc. (NASDAQ:CYTK), ArQule, Inc. (NASDAQ:ARQL), ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), Pain Therapeutics, Inc. (NASDAQ:PTIE), and Amicus Therapeutics, Inc. (NASDAQ:FOLD). All of these stocks are in the biotechnology industry and their market caps are similar to BDSI’s market cap.

Using the returns explained by our strategies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and BioDelivery Sciences International, Inc. (NASDAQ:BDSI) applies perfectly to this mantra.

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