How Are Hedge Funds Trading AMAG Pharmaceuticals, Inc. (AMAG)?

Is AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) the right pick for your portfolio? Prominent investors are taking a pessimistic view. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience

To most shareholders, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds with their doors open at the moment, we look at the moguls of this club, close to 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total capital, and by tracking their best picks, we have formulated a few investment strategies that have historically outpaced the broader indices. 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, positive insider trading activity is a second way to parse down the investments you’re interested in. As the old adage goes: there are many reasons for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the latest action encompassing AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG).

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

In preparation for this quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Phill Gross and Robert Atchinson’s Adage Capital Management had the biggest position in AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), worth close to $98.6 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Palo Alto Investors, managed by William Leland Edwards, which held a $40.1 million position; the fund has 4.8% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and SAC Subsidiary’s CR Intrinsic Investors.

Due to the fact that AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) has witnessed falling interest from hedge fund managers, we can see that there exists a select few funds that elected to cut their entire stakes last quarter. At the top of the heap, Matthew Tewksbury’s Stevens Capital Management cut the largest stake of all the hedgies we key on, totaling an estimated $0.2 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $0 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)?

Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time frame, AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

With the results shown by our research, retail investors must always pay attention to hedge fund and insider trading sentiment, and AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) applies perfectly to this mantra.

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