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Do Hedge Funds and Insiders Love Danaher Corporation (NYSE:DHR)?

Is Danaher Corporation (NYSE:DHR) a buy here? Prominent investors are in a bullish mood. The number of long hedge fund bets went up by 2 in recent months.

If you’d ask most shareholders, hedge funds are assumed to be unimportant, outdated financial tools of years past. While there are more than 8000 funds with their doors open at present, we look at the aristocrats of this group, close to 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total asset base, and by watching their highest performing picks, we have unearthed a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Danaher Corporation

Just as important, positive insider trading sentiment is a second way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of motivations for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action regarding Danaher Corporation (NYSE:DHR).

How have hedgies been trading Danaher Corporation (NYSE:DHR)?

At year’s end, a total of 33 of the hedge funds we track were long in this stock, a change of 6% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, Andreas Halvorsen’s Viking Global had the biggest position in Danaher Corporation (NYSE:DHR), worth close to $804 million billion, comprising 5.6% of its total 13F portfolio. On Viking Global’s heels is David Blood and Al Gore of Generation Investment Management, with a $374 million position; the fund has 8.8% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Doug Silverman’s Senator Investment Group, Steven Cohen’s SAC Capital Advisors and Robert Joseph Caruso’s Select Equity Group.

As aggregate interest increased, key hedge funds have jumped into Danaher Corporation (NYSE:DHR) headfirst. Senator Investment Group, managed by Doug Silverman, established the largest position in Danaher Corporation (NYSE:DHR). Senator Investment Group had 134 million invested in the company at the end of the quarter. Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management also made a $56 million investment in the stock during the quarter. The other funds with new positions in the stock are John Lykouretzos’s Hoplite Capital Management, Malcolm Fairbairn’s Ascend Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

How are insiders trading Danaher Corporation (NYSE:DHR)?

Insider buying is most useful when the company in question has experienced transactions within the past six months. Over the last 180-day time frame, Danaher Corporation (NYSE:DHR) has experienced zero unique insiders buying, and 12 insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s research, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Danaher Corporation (NYSE:DHR) is no exception.

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

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