Is XenoPort, Inc. (XNPT) Going to Burn These Hedge Funds?
Should XenoPort, Inc. (NASDAQ:XNPT) investors track the following data?
At the moment, there are plenty of metrics market participants can use to monitor the equity markets. A pair of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can beat the market by a superb amount (see just how much).
Just as useful, optimistic insider trading sentiment is another way to analyze the world of equities. As the old adage goes: there are a variety of stimuli for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).
Keeping this in mind, it's important to analyze the newest info surrounding XenoPort, Inc. (NASDAQ:XNPT).
Hedge fund activity in XenoPort, Inc. (NASDAQ:XNPT)
Heading into Q3, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably.
When using filings from the hedgies we track, Deerfield Management, managed by James E. Flynn, holds the largest position in XenoPort, Inc. (NASDAQ:XNPT). Deerfield Management has a $20.1 million position in the stock, comprising 0.9% of its 13F portfolio. The second largest stake is held by OrbiMed Advisors, managed by Samuel Isaly, which held a $20 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Julian Baker and Felix Baker's Baker Bros. Advisors, D. E. Shaw's D E Shaw and Cliff Asness's AQR Capital Management.
Since XenoPort, Inc. (NASDAQ:XNPT) has faced bearish sentiment from the top-tier hedge fund industry, it's safe to say that there exists a select few fund managers that elected to cut their full holdings heading into Q2. Intriguingly, SAC Subsidiary's CR Intrinsic Investors sold off the biggest stake of the 450+ funds we watch, valued at close to $5.3 million in stock, and Mike Vranos of Ellington was right behind this move, as the fund dumped about $0.1 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with XenoPort, Inc. (NASDAQ:XNPT)?
Legal insider trading, particularly when it's bullish, is best served when the company we're looking at has experienced transactions within the past half-year. Over the last six-month time period, XenoPort, Inc. (NASDAQ:XNPT) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to XenoPort, Inc. (NASDAQ:XNPT). These stocks are Obagi Medical Products, Inc. (NASDAQ:OMPI), Vical Incorporated (NASDAQ:VICL), Osiris Therapeutics, Inc. (NASDAQ:OSIR), Novavax, Inc. (NASDAQ:NVAX), and 3SBio Inc. (ADR) (NASDAQ:SSRX). This group of stocks are in the biotechnology industry and their market caps match XNPT's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Obagi Medical Products, Inc. (NASDAQ:OMPI)
Vical Incorporated (NASDAQ:VICL)
Osiris Therapeutics, Inc. (NASDAQ:OSIR)
Novavax, Inc. (NASDAQ:NVAX)
3SBio Inc. (ADR) (NASDAQ:SSRX)
Using the results demonstrated by the previously mentioned analyses, average investors should always watch hedge fund and insider trading activity, and XenoPort, Inc. (NASDAQ:XNPT) shareholders fit into this picture quite nicely.