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Alere Inc (ALR): Are Hedge Funds Right About This Stock?

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Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

In this article, we will take a closer look at Alere Inc (NYSE:ALR) and what smart money investors think about it. Overall, the number of long hedge fund positions inched up by three lately. At the end of this article we will also compare ALR to other stocks including Ritchie Bros. Auctioneers (USA) (NYSE:RBA), MAXIMUS, Inc. (NYSE:MMS), and WGL Holdings Inc (NYSE:WGL) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

A and N photography/Shutterstock.com

A and N photography/Shutterstock.com

Keeping this in mind, we’re going to check out the recent action encompassing Alere Inc (NYSE:ALR).

Hedge fund activity in Alere Inc (NYSE:ALR)

At the end of the third quarter, a total of 44 funds tracked by Insider Monkey were bullish on this stock, up by 7% over the quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

HedgeFundSentimentChart

When looking at the institutional investors followed by Insider Monkey, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the most valuable position in Alere Inc (NYSE:ALR). Iridian Asset Management has a $216.6 million position in the stock, comprising 1.9% of its 13F portfolio. Sitting at the No. 2 spot is Thomas Steyer’s Farallon Capital holding a $100.1 million position; 1.5% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish encompass Ric Dillon’s Diamond Hill Capital, Carl Tiedemann and Michael Tiedemann’s TIG Advisors, and Matthew Halbower’s Pentwater Capital Management.

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