Here is What Hedge Funds Think About Dynavax Technologies Corporation (DVAX)

What’s a smart Dynavax Technologies Corporation (NASDAQ:DVAX) investor to do?

If you were to ask many market players, hedge funds are seen as useless, outdated financial vehicles of a forgotten age. Although there are over 8,000 hedge funds in operation in present day, this site focuses on the leaders of this group, about 525 funds. Analysts calculate that this group oversees the majority of all hedge funds’ total capital, and by tracking their highest performing picks, we’ve unsheathed a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as useful, positive insider trading activity is a second way to look at the investments you’re interested in. Obviously, there are a number of reasons for an insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if “monkeys” know what to do (learn more here).

Furthermore, it’s important to analyze the latest info for Dynavax Technologies Corporation (NASDAQ:DVAX).

What does the smart money think about Dynavax Technologies Corporation (NASDAQ:DVAX)?

Heading into Q3, a total of 12 of the hedge funds we track held long positions in this stock, a change of -20% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably.

Out of the hedge funds we follow, Arthur B Cohen and Joseph Healey’s Healthcor Management LP had the biggest position in Dynavax Technologies Corporation (NASDAQ:DVAX), worth close to $19.4 million, accounting for 1.2% of its total 13F portfolio. Coming in second is Samuel Isaly of OrbiMed Advisors, with a $9.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Peter Kolchinsky’s RA Capital Management, Charles Davidson’s Wexford Capital and Steven Cohen’s SAC Capital Advisors.

Due to the fact Dynavax Technologies Corporation (NASDAQ:DVAX) has faced a fall in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers that elected to cut their entire stakes last quarter. At the top of the heap, Andrew J. M. Spokes’s Farallon Capital dumped the biggest investment of the 450+ funds we track, totaling close to $2.2 million in stock. J. Alan Reid Jr.’s fund, Forward Management, also dropped its stock, about $0.9 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.

How have insiders been trading Dynavax Technologies Corporation (NASDAQ:DVAX)?

Legal insider trading, particularly when it’s bullish, is best served when the primary stock in question has experienced transactions within the past six months. Over the last six-month time frame, Dynavax Technologies Corporation (NASDAQ:DVAX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Dynavax Technologies Corporation (NASDAQ:DVAX). These stocks are Orexigen Therapeutics, Inc. (NASDAQ:OREX), Lannett Company, Inc. (NYSEAMEX:LCI), Simcere Pharmaceutical Group (ADR) (NYSE:SCR), Depomed Inc (NASDAQ:DEPO), and Synergy Pharmaceuticals Inc (NASDAQ:SGYP). This group of stocks are the members of the drug manufacturers – other industry and their market caps match DVAX’s market cap.