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Does Teva Pharmaceutical Industries Ltd (ADR) (TEVA) Represent a Good Investment?

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) was in 70 hedge funds’ portfolios at the end of the third quarter of 2015. TEVA has seen a decrease in hedge fund interest lately. There were 77 hedge funds in our database with TEVA holdings at the end of the previous quarter. At the end of this article we will also compare TEVA to other stocks including General Motors Company (NYSE:GM), EMC Corporation (NYSE:EMC), and Statoil ASA (ADR) (NYSE:STO) to get a better sense of its popularity.

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In the 21st century investor’s toolkit there is a multitude of signals that stock market investors can use to appraise stocks. A couple of the best signals are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best money managers can outclass the S&P 500 by a solid margin (see the details here).

With all of this in mind, let’s view the key action regarding Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA).

How are hedge funds trading Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)?

At the end of the third quarter, a total of 70 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeremy Green’s Redmile Group has the biggest position in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), worth close to $1.0224 billion, amounting to 23.5% of its total 13F portfolio. On Redmile Group’s heels is Paulson & Co, led by John Paulson, holding a $1.02 billion position; the fund has 5.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism encompass Andreas Halvorsen’s Viking Global, Jonathon Jacobson’s Highfields Capital Management and Zach Schreiber’s Point State Capital.

Because Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has experienced falling interest from the smart money, it’s safe to say that there is a sect of funds that elected to cut their positions entirely heading into Q4. Intriguingly, Daniel S. Och’s OZ Management dumped the largest stake of the 700 funds followed by Insider Monkey, totaling close to $216.1 million in stock. Stephen V. Raneri’s fund, LionEye Capital Management, also said goodbye to its position, about $65 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest fell by seven funds heading into the fourth quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) but similarly valued. We will take a look at General Motors Company (NYSE:GM), EMC Corporation (NYSE:EMC), Statoil ASA (ADR) (NYSE:STO), and HP Inc. (NYSE:HPQ). This group of stocks’ market caps resemble TEVA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GM 88 5112756 -16
EMC 65 3359159 11
STO 10 62793 2
HPQ 59 3068099 4

As you can see these stocks had an average of 56 hedge funds with bullish positions and the average amount invested in these stocks was $2901 million. General Motors Company (NYSE:GM) is the most popular stock in this table, while Statoil ASA (ADR) (NYSE:STO) is the least popular one with only 10 long positions. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is not the most popular stock in this group and hedge funds held $6.8 billion worth of Teva’s stock at the end of September. Therefore, Teva may be worth your attention and requires a more detailed analysis, but other stocks from this group may also be considered for investing.

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