Is Pharmacyclics, Inc. (NASDAQ:PCYC) an outstanding investment now? Money managers are taking an optimistic view. The number of long hedge fund bets went up by 2 recently.
To most shareholders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey hone in on the top tier of this club, about 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total capital, and by monitoring their best picks, we have revealed a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as key, bullish insider trading activity is another way to break down the investments you’re interested in. As the old adage goes: there are lots of motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).
Consequently, it’s important to take a glance at the latest action surrounding Pharmacyclics, Inc. (NASDAQ:PCYC).
Hedge fund activity in Pharmacyclics, Inc. (NASDAQ:PCYC)
At the end of the first quarter, a total of 23 of the hedge funds we track were bullish in this stock, a change of 10% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the most valuable position in Pharmacyclics, Inc. (NASDAQ:PCYC). Baker Bros. Advisors has a $878.4 million position in the stock, comprising 17.5% of its 13F portfolio. The second largest stake is held by Jacob Gottlieb of Visium Asset Management, with a $61 million position; 1.6% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Daniel Gold’s QVT Financial, Steven Cohen’s SAC Capital Advisors and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.
As one would reasonably expect, key money managers have been driving this bullishness. Deerfield Management, managed by James E. Flynn, created the largest position in Pharmacyclics, Inc. (NASDAQ:PCYC). Deerfield Management had 27.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $16.9 million position during the quarter. The other funds with brand new PCYC positions are Donald Chiboucis’s Columbus Circle Investors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Dmitry Balyasny’s Balyasny Asset Management.
How are insiders trading Pharmacyclics, Inc. (NASDAQ:PCYC)?
Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest six-month time frame, Pharmacyclics, Inc. (NASDAQ:PCYC) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Pharmacyclics, Inc. (NASDAQ:PCYC). These stocks are United Therapeutics Corporation (NASDAQ:UTHR), Forest Laboratories, Inc. (NYSE:FRX), Warner Chilcott Plc (NASDAQ:WCRX), Endo Health Solutions Inc (NASDAQ:ENDP), and Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY). This group of stocks belong to the drug manufacturers – other industry and their market caps resemble PCYC’s market cap.
