Is AbbVie Inc (NYSE:ABBV) a sound investment today? Investors who are in the know are becoming hopeful. The number of bullish hedge fund bets went up by 23 recently.
According to most market participants, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at present, we at Insider Monkey look at the elite of this group, around 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by tracking their highest performing investments, we have spotted a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as beneficial, bullish insider trading sentiment is another way to break down the financial markets. There are plenty of incentives for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if you know what to do (learn more here).
Consequently, we’re going to take a gander at the recent action regarding AbbVie Inc (NYSE:ABBV).
Hedge fund activity in AbbVie Inc (NYSE:ABBV)
In preparation for this quarter, a total of 39 of the hedge funds we track held long positions in this stock, a change of 144% from the first quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the most valuable position in AbbVie Inc (NYSE:ABBV), worth close to $158.7 million, accounting for 1.3% of its total 13F portfolio. On Arrowstreet Capital’s heels is Arthur B Cohen and Joseph Healey of Healthcor Management LP, with a $148.8 million position; the fund has 6.5% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Dan Loeb’s Third Point, Jim Simons’s Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management.
Now, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in AbbVie Inc (NYSE:ABBV). Arrowstreet Capital had 158.7 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $99 million investment in the stock during the quarter. The following funds were also among the new ABBV investors: Samuel Isaly’s OrbiMed Advisors, Robert Pohly’s Samlyn Capital, and Ken Griffin’s Citadel Investment Group.
What have insiders been doing with AbbVie Inc (NYSE:ABBV)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, AbbVie Inc (NYSE:ABBV) has seen 2 unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to AbbVie Inc (NYSE:ABBV). These stocks are Merck & Co., Inc. (NYSE:MRK), GlaxoSmithKline plc (ADR) (NYSE:GSK), Bristol Myers Squibb Co. (NYSE:BMY), AstraZeneca plc (ADR) (NYSE:AZN), and Eli Lilly & Co. (NYSE:LLY). This group of stocks are in the drug manufacturers – major industry and their market caps resemble ABBV’s market cap.