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AmerisourceBergen Corp. (NYSE:ABC): Are Hedge Funds Right About This Stock?

AmerisourceBergen Corp. (NYSE:ABC) was in 16 hedge funds’ portfolio at the end of the fourth quarter of 2012. ABC has seen a decrease in enthusiasm from smart money lately. There were 21 hedge funds in our database with ABC positions at the end of the previous quarter.

AmerisourceBergen Corp. (NYSE:ABC)

At the moment, there are tons of indicators shareholders can use to monitor their holdings. 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 top investment managers can outclass the market by a solid margin (see just how much).

Just as important, positive insider trading activity is another way to parse down the investments you’re interested in. Obviously, there are a variety of incentives for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).

With all of this in mind, it’s important to take a look at the recent action encompassing AmerisourceBergen Corp. (NYSE:ABC).

What does the smart money think about AmerisourceBergen Corp. (NYSE:ABC)?

In preparation for this year, a total of 16 of the hedge funds we track were long in this stock, a change of -24% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Doug Silverman’s Senator Investment Group had the most valuable position in AmerisourceBergen Corp. (NYSE:ABC), worth close to $151 million, comprising 3.3% of its total 13F portfolio. Sitting at the No. 2 spot is Shannon River Fund Management, managed by Spencer M. Waxman, which held a $27 million position; 3.6% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, David Harding’s Winton Capital Management and Ken Fisher’s Fisher Asset Management.

Seeing as AmerisourceBergen Corp. (NYSE:ABC) has experienced falling interest from hedge fund managers, we can see that there is a sect of money managers that slashed their full holdings heading into 2013. It’s worth mentioning that Robert Emil Zoellner’s Alpine Associates dumped the biggest stake of the 450+ funds we key on, totaling close to $271 million in stock.. Douglas Hirsch’s fund, Seneca Capital, also dropped its call options., about $14 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds heading into 2013.

Insider trading activity in AmerisourceBergen Corp. (NYSE:ABC)

Bullish insider trading is particularly usable when the company in question has seen transactions within the past 180 days. Over the last six-month time frame, AmerisourceBergen Corp. (NYSE:ABC) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

With the returns exhibited by Insider Monkey’s studies, retail investors must always pay attention to hedge fund and insider trading sentiment, and AmerisourceBergen Corp. (NYSE:ABC) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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