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To most shareholders, hedge funds are seen as slow, outdated investment vehicles of the past.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.

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 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!