This Metric Says You Are Smart to Sell Vertex Pharmaceuticals Incorporated (VRTX)

Is Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) the right investment to pursue these days? The smart money is getting less optimistic. The number of bullish hedge fund bets fell by 5 in recent months.

In today’s marketplace, there are dozens of gauges market participants can use to watch stocks. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can beat the broader indices by a solid margin (see just how much).

Just as key, bullish insider trading activity is a second way to break down the financial markets. Obviously, there are a variety of incentives for an executive to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

Keeping this in mind, we’re going to take a peek at the latest action encompassing Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX).

How have hedgies been trading Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)?

In preparation for this quarter, a total of 22 of the hedge funds we track were bullish in this stock, a change of -19% from one quarter earlier.

Because Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has witnessed falling interest from hedge fund managers, it’s safe to say that there is a sect of funds that slashed their full holdings last quarter. Interestingly, Arthur B Cohen and Joseph Healey’s Healthcor Management LP sold off the largest stake of all the hedgies we monitor, worth close to $15.7 million in stock.. Jacob Gottlieb’s fund, Visium Asset Management, also dropped its stock, about $14.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 5 funds last quarter.

Insider trading activity in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Insider buying is most useful when the company in question has experienced transactions within the past six months. Over the last 180-day time period, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). These stocks are Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX), Illumina, Inc. (NASDAQ:ILMN), BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and Regeneron Pharmaceuticals Inc (NASDAQ:REGN). This group of stocks are in the biotechnology industry and their market caps match VRTX’s market cap.

With the returns demonstrated by the aforementioned research, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is an important part of this process.

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