Hedge Funds Are Selling WellPoint, Inc. (WLP)

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WellPoint, Inc. (NYSE:WLP) was in 44 hedge funds’ portfolio at the end of March. WLP shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 45 hedge funds in our database with WLP positions at the end of the previous quarter.

WellPoint, Inc. (NYSE:WLP)

According to most investors, hedge funds are viewed as unimportant, outdated investment tools of yesteryear. While there are greater than 8000 funds trading at the moment, we at Insider Monkey choose to focus on the aristocrats of this club, around 450 funds. It is estimated that this group controls most of the smart money’s total capital, and by watching their top stock picks, we have unsheathed a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, bullish insider trading sentiment is another way to break down the investments you’re interested in. There are a variety of incentives for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this method if “monkeys” understand where to look (learn more here).

With all of this in mind, we’re going to take a peek at the latest action encompassing WellPoint, Inc. (NYSE:WLP).

What have hedge funds been doing with WellPoint, Inc. (NYSE:WLP)?

At the end of the first quarter, a total of 44 of the hedge funds we track were bullish in this stock, a change of -2% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially.

Of the funds we track, William B. Gray’s Orbis Investment Management had the largest position in WellPoint, Inc. (NYSE:WLP), worth close to $736.5 million, accounting for 6.3% of its total 13F portfolio. Coming in second is First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $413.2 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Donald Yacktman’s Yacktman Asset Management, Paul Reeder and Edward Shapiro’s PAR Capital Management and Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC.

Judging by the fact that WellPoint, Inc. (NYSE:WLP) has faced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds that decided to sell off their entire stakes at the end of the first quarter. Interestingly, Alan Fournier’s Pennant Capital Management sold off the biggest position of the “upper crust” of funds we track, totaling close to $194.3 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund sold off about $137.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds at the end of the first quarter.

Insider trading activity in WellPoint, Inc. (NYSE:WLP)

Insider buying is most useful when the company in question has experienced transactions within the past 180 days. Over the last six-month time frame, WellPoint, Inc. (NYSE:WLP) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to WellPoint, Inc. (NYSE:WLP). These stocks are UnitedHealth Group Inc. (NYSE:UNH), Express Scripts Holding Company (NASDAQ:ESRX), Humana Inc (NYSE:HUM), Aetna Inc. (NYSE:AET), and CIGNA Corporation (NYSE:CI). All of these stocks are in the health care plans industry and their market caps resemble WLP’s market cap.

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