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Fresenius Medical Care AG & Co. (ADR) (FMS): Are Hedge Funds Right About This Stock?

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We know that hedge funds generate strong risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS).

Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) was in 6 hedge funds’ portfolios at the end of the third quarter of 2016. FMS has seen a decrease in activity from the world’s largest hedge funds lately. There were 7 hedge funds in our database with FMS holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Health Care REIT, Inc. (NYSE:HCN), Illumina, Inc. (NASDAQ:ILMN), and O’Reilly Automotive Inc (NASDAQ:ORLY) to gather more data points.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Tyler Olson/Shutterstock.com

Tyler Olson/Shutterstock.com

Keeping this in mind, we’re going to take a glance at the key action surrounding Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS).

How have hedgies been trading Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS)?

At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in FMS over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

FMS Chart

According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies, one of the largest hedge funds in the world, has the number one position in Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS), worth close to $2.6 million, corresponding to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Sivik Global Healthcare, led by Krishen Sud, holding a $1.8 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions encompass Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Mike Vranos’s Ellington. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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