market folly

We recently saw two SEC filings of note out of Steven Cohen's hedge fund firm SAC Capital. Firstly, in a 13G filed with the SEC, SAC Capital has disclosed a 5.5% ownership stake in Dendreon (DNDN). The filing was made due to activity on January 7th, 2010 and they now own 7,282,030 shares. The breakdown of their share ownership is a bit complex and you have to dig into the footnotes to gain clarification. These totals include 3,900 shares subject to call options held by SAC Select Fund and 375,000 Shares subject to call options held by SAC Capital Associates, and 425,000 shares subject to call options held by CR Intrinsic Investments.

Secondly, SAC Capital filed another 13G on shares of Vermillion (VRMLQ). The filing was made due to activity on January 7th, 2010 and they now show a 9.9% ownership stake with 1,015,000 shares.

SAC Capital finished 2009 up over 28% as noted in our hedge fund 2009 performance numbers post. Keep in mind that Cohen's SAC Capital uses trading as their primary strategy and as such they move in and out of positions much more frequently than the other hedge funds we track here at Market Folly. We also note a common link in SAC's SEC filings. Of the large stakes they often disclose via 13D or 13G filings, the vast majority are in various biotech, pharmaceutical, and medical companies. Our past coverage on SAC & Steven Cohen includes a piece on the link between hedge fund managers and poker.

Previously, they were ranked #17 in Barron's hedge fund top 100 rankings. Taken from SAC's website earlier this year, “SAC is a multi-strategy, private asset management firm founded by Steven A. Cohen in 1992 with 9 employees and $25 million in assets under management. As of July 2008, the firm has grown to over 800 employees with approximately $14 billion in assets under management. SAC's initial investment style was "trading" oriented. However, we have evolved into a multi-strategy, multi-disciplinary, investment management firm emphasizing rigorous research and risk management practices. SAC's investment strategies include, but are not limited to: Fundamental and Technical Long/Short Equity Portfolios, Global Quantitative Strategies, Fixed Income and Credit, Global Macro Strategies, Convertible Bonds, and Emerging Markets.”

Taken from Google Finance, Dendreon is "a biotechnology company focused on the discovery, development and commercialization of therapeutics that improve cancer treatment options for patients. Dendreon’s most advanced product candidate is Provenge (sipuleucel-T), an active cellular immunotherapy that has completed two Phase III trials for the treatment of asymptomatic, metastatic, androgen-independent prostate cancer."

Vermillion is "is involved in the discovery, development and commercialization of diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. The Company uses the process of utilizing advanced protein separation methods to identify and resolve variants of specific biomarkers (known as translational proteomics) for developing a procedure to measure a property or concentration of an analyte (known as an assay) and commercializing diagnostic tests. Vermillion has focuses in the areas of oncology, hematology, cardiology and women’s health."