Is Spectrum Pharmaceuticals, Inc. (SPPI) Going to Burn These Hedge Funds?

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) was in 12 hedge funds’ portfolio at the end of the first quarter of 2013. SPPI has experienced a decrease in support from the world’s most elite money managers lately. There were 14 hedge funds in our database with SPPI positions at the end of the previous quarter.

In the financial world, there are plenty of indicators investors can use to monitor stocks. Two of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can beat the broader indices by a significant margin (see just how much).

Equally as integral, optimistic insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are plenty of stimuli for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if “monkeys” know where to look (learn more here).

With all of this in mind, it’s important to take a glance at the latest action regarding Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI).

What does the smart money think about Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)?

At the end of the first quarter, a total of 12 of the hedge funds we track were long in this stock, a change of -14% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, D E Shaw, managed by D. E. Shaw, holds the most valuable position in Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI). D E Shaw has a $6.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Sean Cullinan of Point State Capital, with a $5.6 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish include Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, William Leland Edwards’s Palo Alto Investors and Daniel S. Och’s OZ Management.

Seeing as Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has faced bearish sentiment from hedge fund managers, it’s safe to say that there is a sect of fund managers that elected to cut their positions entirely heading into Q2. At the top of the heap, Julian Baker and Felix Baker’s Baker Bros. Advisors said goodbye to the largest position of the “upper crust” of funds we monitor, totaling about $16.8 million in stock., and Robert B. Gillam of McKinley Capital Management was right behind this move, as the fund cut about $3.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds heading into Q2.

What do corporate executives and insiders think about Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI). These stocks are Emergent Biosolutions Inc (NYSE:EBS), Sequenom, Inc. (NASDAQ:SQNM), Idenix Pharmaceuticals Inc (NASDAQ:IDIX), Dyax Corp. (NASDAQ:DYAX), and QLT Inc. (USA) (NASDAQ:QLTI). All of these stocks are in the biotechnology industry and their market caps resemble SPPI’s market cap.

With the returns exhibited by Insider Monkey’s research, retail investors should always monitor hedge fund and insider trading sentiment, and Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) applies perfectly to this mantra.

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