Incyte Corporation (INCY): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

Should investors be bullish on Incyte Corporation (NASDAQ:INCY)?

In the 21st century investor’s toolkit, there are many gauges shareholders can use to track their holdings. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a very impressive amount (see just how much).

Equally as key, optimistic insider trading sentiment is a second way to analyze the world of equities. As the old adage goes: there are many stimuli for an executive to downsize shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).

Now that that’s out of the way, let’s discuss the recent info about Incyte Corporation (NASDAQ:INCY).

What have hedge funds been doing with Incyte Corporation (NASDAQ:INCY)?

At the end of the second quarter, a total of 17 of the hedge funds we track held long positions in this stock, a change of 6% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes considerably.

When using filings from the hedgies we track, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the largest position in Incyte Corporation (NASDAQ:INCY). Baker Bros. Advisors has a $325.8 million position in the stock, comprising 6.4% of its 13F portfolio. The second largest stake is held by Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, which held a $168.1 million position; the fund has 5% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Samuel Isaly’s OrbiMed Advisors, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.

As aggregate interest spiked, certain money managers were breaking ground themselves. Baker Bros. Advisors, managed by Julian Baker and Felix Baker, created the biggest position in Incyte Corporation (NASDAQ:INCY). Baker Bros. Advisors had 401.7 million invested in the company at the end of the quarter. Julian Baker and Felix Baker’s Baker Bros. Advisors also made a $325.8 million investment in the stock during the quarter. The following funds were also among the new INCY investors: Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management, Samuel Isaly’s OrbiMed Advisors, and Ken Griffin’s Citadel Investment Group.

Insider trading activity in Incyte Corporation (NASDAQ:INCY)

Insider buying made by high-level executives is best served when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Incyte Corporation (NASDAQ:INCY) 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 Incyte Corporation (NASDAQ:INCY). These stocks are Infinity Pharmaceuticals Inc. (NASDAQ:INFI), Theravance Inc (NASDAQ:THRX), Medivation Inc (NASDAQ:MDVN), Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), and Jazz Pharmaceuticals plc – Ordinary Shares (NASDAQ:JAZZ). This group of stocks belong to the biotechnology industry and their market caps are closest to INCY’s market cap.

Using the returns explained by our research, average investors should always watch hedge fund and insider trading sentiment, and Incyte Corporation (NASDAQ:INCY) is no exception.

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