In this article, we will take a detailed look at Insiders Are Dumping These 10 Healthcare Stocks. For a quick overview of such stocks, read our article Insiders Are Dumping These 5 Healthcare Stocks.
Healthcare-focused investors were nervous when 2024 started, since election years usually do not bode well for the healthcare industry amid policy-related uncertainties. But healthcare stocks are performing exceptionally well this year, defying all skepticism. The S&P 500 Health Care has gained about 8.3% so far this year, compared to the 10.6% jump in the broader S&P 500 index. A latest report by the Wall Street Journal, quoting data from Dow Jones, said that this has been the best start for the healthcare sector since 2017. Part of the reason why healthcare stocks are growing is the huge gains posted by companies making GLP-1 drugs for weight loss and diabetes. Eli Lilly And Co (NYSE:LLY)’s obesity drug Zepbound is reportedly seeing a huge demand, causing a severe shortage across the US. The company is also behind Mounjaro, an antidiabetic medication used for the treatment of type 2 diabetes and for weight loss. Eli Lilly And Co (NYSE:LLY) shares have gained about 31% so far this year.
Eli Lilly And Co (NYSE:LLY)’s management talked in detail about the company’s diabetes and obesity drugs along with its future plans during Q4 earnings call:
“This year, we’re planning to initiate a Phase III program in Type 2 diabetes for retatrutide, complementing the ongoing trials in obesity and related complications. Also this year, we are planning to initiate a Phase III program for Lepodiserin, our LPA-lowering siRNA therapy in cardiovascular disease. On Tirzepatide, we’re looking forward to a number of additional key data readouts this year. Beyond SYNERGY-NASH, we expect to see results from the Phase III obstructive sleep apnea and Phase III heart failure studies this year. We note increased investor interest in the timing of SURPASS-CVOT, and we reiterate that we expect the data in 2025, notwithstanding the clinicaltrials.gov listing which will be updated soon to reflect our current assumptions based on event rate.
By the end of 2024, we expect to have results of SURMOUNT 5, which is our head-to-head study of Tirzepatide compared to high-dose semaglutide in participants with obesity. We also expect the full Phase III program readout on our weekly basal insulin, insulin efsitora alfa alpha later this year.”
Read the entire earnings call transcript here.
Denmark-based Novo Nordisk A/S (NYSE:NVO) is also making waves in the industry with its own diabetes and weight loss treatments, Ozempic and Wegovy. Novo Nordisk A/S (NYSE:NVO) jumped earlier this month after the company said that a Phase 1 trial of its Amycretin treatment demonstrated weight loss of 13% after 12 weeks, compared to 6% weight loss patients experienced after 12 weeks in a Wegovy trial.
Novo Nordisk A/S (NYSE:NVO) shares have gained about 25% this year through March 28.
Healthcare and biotech stocks are also seeing a boost amid hopes of rate cuts. When rates are low, healthcare and biotech companies go into expansion mode. There’s already a lot of activity in company pipelines. The WSJ reported that the FDA approved 55 new drugs last year, a significant increase from its 10-year average of 46 drugs.
Despite this optimism, there are some healthcare stocks that recently saw insider selling activity. In this article we will take a look at these companies.
Luis Louro / shutterstock.com
Methodology
For this article, we first used Insider Monkey’s insider trading stock screener and listed healthcare stocks that saw insider selling over the past three weeks. From these companies we picked 10 stocks which saw the biggest insider selling transactions in terms of dollar value. But why is it important to keep tabs on hedge fund and insider activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Healthequity Inc (NASDAQ:HQY)
Number of Hedge Fund Investors: 18
Healthequity provides financial and technology solutions in the healthcare industry. Healthequity Inc’s (NASDAQ:HQY) CEO Jon Kessleron on March 22 sold 33,765 shares of Healthequity Inc (NASDAQ:HQY) at $79.81 per share. Since then the stock price is almost flat.
As of the end of the fourth quarter of 2023, 18 hedge funds had stakes in Healthequity Inc (NASDAQ:HQY).
Wasatch Core Growth Fund stated the following regarding HealthEquity, Inc. (NASDAQ:HQY) in its fourth quarter 2023 investor letter:
“Another weak position in the Fund was HealthEquity, Inc. (NASDAQ:HQY), the largest U.S. non-bank custodian for health savings accounts (HSAs). Along with offering HSAs, the company also facilitates employer-sponsored lifestyle and commuter benefits, which include fitness classes, parking programs and transit passes. The stock was down because investors looked ahead to an environment of lower interest rates when the company would earn less income from money held on deposit for customers. While lower rates are a small headwind for HealthEquity, its business model is structured so that the near- to mid-term impact is negligible and more than offset by the continued long-term growth of its entire platform. Given our confidence in HealthEquity, we added to our position on stock-price weakness.”
9. Progyny Inc (NASDAQ:PGNY)
Number of Hedge Fund Investors: 28
Fertility-related solutions and benefits company Progyny Inc (NASDAQ:PGNY) is one of the healthcare stocks with recent insider selling activity. David Schlanger, the Executive Chairman of Progyny Inc (NASDAQ:PGNY), on March 21 dumped 5,826 shares of Progyny Inc (NASDAQ:PGNY) at $37.74. Progyny Inc’s (NASDAQ:PGNY) CFO Mark Livingston also sold 8,222 shares of Progyny Inc (NASDAQ:PGNY) on March 1 at $36.67 per share. Since this transaction the stock has increased by 2.83%.
During its Q4 earnings call last month, the company talked about guidance:
“Looking forward, we expect a mid-70% conversion of full-year adjusted EBITDA to operating cash flow, excluding the impact of any cash taxes. As of December 31, we had total working capital of approximately $454 million reflecting $371 million of cash, cash equivalents and marketable securities and no debt. Finally, turning now to our expectations for the first quarter and the full-year 2024. For revenue, we are projecting between $285 million to $292 million in the first quarter, which contemplates the $15 million headwind in treatment mix shift that, Pete, described to you a little bit earlier. With the visibility that we have into more recent activity, we can see that mix is trending more consistent to what we’d expect, and we’ve reflected that in our guidance over the balance of the year.
For 2024, we project revenue of between $1.285 billion to $1.315 billion reflecting growth of between 18% and 21%. Turning to profitability. We expect between $49 million to $51 million in adjusted EBITDA in the first quarter along with net income of between $12.4 million to $13.7 million.”
Read the entire earnings call transcript here.
Polen Global SMID Company Growth Strategy made the following comment about Progyny, Inc. (NASDAQ:PGNY) in its Q3 2023 investor letter:
“We bought a new position in Progyny, Inc. (NASDAQ:PGNY), a company owned in our U.S. strategies for some time. They are a leading provider of fertility benefit solutions, and through their differentiated approach, their clients can pursue the most effective treatment and achieve optimal outcomes. We believe the company has only a mid-single digit share of its potential total addressable market and is the most dominant player within the fast-growing managed care category. They are already profitable, earn high returns on incremental capital, and have plenty of runway to grow top-line growth as they continue to win new clients and add new services.”
8. Exelixis Inc (NASDAQ:EXEL)
Number of Hedge Fund Investors: 33
Genomics-based drug discovery company Exelixis Inc (NASDAQ:EXEL) ranks eighth in our list of the healthcare stocks with recent insider selling activity. Alan M. Garber, a board member at Exelixis Inc (NASDAQ:EXEL), on March 21 sold 19,205 shares of Exelixis Inc (NASDAQ:EXEL) at $24.01 per share. Patrick J Haley, the EVP Commercial at Exelixis Inc (NASDAQ:EXEL), also dumped about 47,000 shares of Exelixis Inc (NASDAQ:EXEL) at $21.45 per share on March 23. Since March 21 the stock is down 1.3%.
While EXEL saw insider selling, major companies like Novo Nordisk A/S (NYSE:NVO) and Eli Lilly And Co (NYSE:LLY) are seeing an increased interest from both insiders and hedge funds.
7. Blueprint Medicines Corp (NASDAQ:BPMC)
Number of Hedge Fund Investors: 33
Blueprint Medicines Corp (NASDAQ:BPMC) ranks seventh in our list of the healthcare stocks with latest insider selling activity. Jeffrey Albers, a director at Blueprint Medicines Corp’s (NASDAQ:BPMC) board, on March 7 sold 11,033 shares of Blueprint Medicines Corp (NASDAQ:BPMC) at $90.69 per shares. Since then the stock is down 2.6%.
As of the end of the fourth quarter of 2023, 33 hedge funds had stakes in Blueprint Medicines Corp (NASDAQ:BPMC), up from 25 hedge funds in the previous quarter. Unlike Novo Nordisk A/S (NYSE:NVO) and Eli Lilly And Co (NYSE:LLY), BPMC is a small company that is seeing insider selling.
6. Arcellx Inc (NASDAQ:ACLX)
Number of Hedge Fund Investors: 33
Arcellx Inc (NASDAQ:ACLX) works on treatments for cancer and autoimmune diseases. Jill Carroll, a director at Arcellx Inc’s (NASDAQ:ACLX) board, on March 21 sold 504,263 shares of Arcellx Inc (NASDAQ:ACLX) at $70.55 per share. Since then the stock is down 2.6%. The director also conducted massive selling of the stock last year.
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Disclosure. None. Insiders Are Dumping These 10 Healthcare Stocks is originally published on Insider Monkey.