Eli Lilly & Co. (NYSE:LLY): Insiders Are Dumping, Should You?

Eli Lilly & Co. (NYSE:LLY) investors should pay attention to a decrease in support from the world’s most elite money managers lately.

To most shareholders, hedge funds are seen as slow, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey hone in on the elite of this group, close to 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by watching their top investments, we have deciphered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Eli Lilly & Co. (NYSE:LLY)Equally as beneficial, positive insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are plenty of incentives for an executive to get rid of shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the latest action encompassing Eli Lilly & Co. (NYSE:LLY).

Hedge fund activity in Eli Lilly & Co. (NYSE:LLY)

At year’s end, a total of 34 of the hedge funds we track were long in this stock, a change of -15% from the third quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.

Of the funds we track, Jim Simons’s Renaissance Technologies had the largest position in Eli Lilly & Co. (NYSE:LLY), worth close to $400 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $138 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.

Judging by the fact that Eli Lilly & Co. (NYSE:LLY) has faced falling interest from hedge fund managers, we can see that there was a specific group of hedgies that slashed their full holdings heading into 2013. At the top of the heap, Andreas Halvorsen’s Viking Global said goodbye to the biggest investment of the “upper crust” of funds we key on, worth an estimated $234 million in stock., and Alan Fournier of Pennant Capital Management was right behind this move, as the fund dumped about $54 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 6 funds heading into 2013.

What have insiders been doing with Eli Lilly & Co. (NYSE:LLY)?

Insider buying is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last six-month time frame, Eli Lilly & Co. (NYSE:LLY) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

With the results shown by Insider Monkey’s strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Eli Lilly & Co. (NYSE:LLY) applies perfectly to this mantra.

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.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!