Valeant Pharmaceuticals Intl Inc (NYSE:VRX) was in 37 hedge funds’ portfolio at the end of March. VRX shareholders have witnessed an increase in enthusiasm from smart money recently. There were 35 hedge funds in our database with VRX holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are perceived as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey hone in on the aristocrats of this club, about 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total capital, and by watching their top stock picks, we have uncovered a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat 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 integral, optimistic insider trading sentiment is a second way to parse down the world of equities. Obviously, there are many reasons for an executive to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this method if investors know where to look (learn more here).
Consequently, we’re going to take a peek at the key action encompassing Valeant Pharmaceuticals Intl Inc (NYSE:VRX).
What does the smart money think about Valeant Pharmaceuticals Intl Inc (NYSE:VRX)?
Heading into Q2, a total of 37 of the hedge funds we track were long in this stock, a change of 6% from the previous quarter.
As industrywide interest jumped, key hedge funds have jumped into Valeant Pharmaceuticals Intl Inc (NYSE:VRX) headfirst. Lone Pine Capital, managed by Stephen Mandel, created the most outsized position in Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Lone Pine Capital had 368.5 million invested in the company at the end of the quarter. William B. Gray’s Orbis Investment Management also made a $153.7 million investment in the stock during the quarter. The following funds were also among the new VRX investors: Eric Chen’s Antipodean Advisors and Charles Anderson’s Fox Point Capital Management.
How are insiders trading Valeant Pharmaceuticals Intl Inc (NYSE:VRX)?
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Valeant Pharmaceuticals Intl Inc (NYSE:VRX). These stocks are Delcath Systems, Inc. (NASDAQ:DCTH), Petmed Express Inc (NASDAQ:PETS), Alkermes Plc (NASDAQ:ALKS), Hospira, Inc. (NYSE:HSP), and Elan Corporation, plc (ADR) (NYSE:ELN). This group of stocks are in the drug delivery industry and their market caps are closest to VRX’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Delcath Systems, Inc. (NASDAQ:DCTH) | 4 | 0 | 0 |
| Petmed Express Inc (NASDAQ:PETS) | 11 | 0 | 2 |
| Alkermes Plc (NASDAQ:ALKS) | 15 | 0 | 10 |
| Hospira, Inc. (NYSE:HSP) | 21 | 0 | 0 |
| Elan Corporation, plc (ADR) (NYSE:ELN) | 33 | 0 | 0 |
With the results demonstrated by Insider Monkey’s studies, everyday investors must always monitor hedge fund and insider trading sentiment, and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) applies perfectly to this mantra.
