To the average investor, there are a multitude of methods shareholders can use to monitor publicly traded companies. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outclass the S&P 500 by a significant margin (see just how much).
Just as necessary, optimistic insider trading sentiment is a second way to look at the financial markets. As the old adage goes: there are a number of incentives for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).
Now that that's out of the way, it's important to discuss the latest info about Edwards Lifesciences Corp (NYSE:EW).
In preparation for the third quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of -10% from the first quarter. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their holdings meaningfully.
According to our 13F database, Jerome Pfund and Michael Sjostrom's Sectoral Asset Management had the largest position in Edwards Lifesciences Corp (NYSE:EW), worth close to $118.2 million, comprising 3.5% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $17 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Jim Simons's Renaissance Technologies, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Because Edwards Lifesciences Corp (NYSE:EW) has witnessed dropping sentiment from the entirety of the hedge funds we track, we can see that there is a sect of funds that slashed their entire stakes in Q1. It's worth mentioning that SAC Subsidiary's CR Intrinsic Investors dropped the biggest stake of the "upper crust" of funds we monitor, comprising an estimated $15.2 million in stock, and Arthur B Cohen and Joseph Healey of Healthcor Management LP was right behind this move, as the fund dumped about $14.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 2 funds in Q1.
Legal insider trading, particularly when it's bullish, is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time period, Edwards Lifesciences Corp (NYSE:EW) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Edwards Lifesciences Corp (NYSE:EW). These stocks are Zimmer Holdings, Inc. (NYSE:ZMH), St. Jude Medical, Inc. (NYSE:STJ), Varian Medical Systems, Inc. (NYSE:VAR), Boston Scientific Corporation (NYSE:BSX), and Smith & Nephew plc (ADR) (NYSE:SNN). This group of stocks are the members of the medical appliances & equipment industry and their market caps match EW's market cap.