Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) investors should be aware of a decrease in hedge fund interest in recent months.
According to most stock holders, hedge funds are seen as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey choose to focus on the upper echelon of this group, around 450 funds. Most estimates calculate that this group controls most of the smart money’s total asset base, and by paying attention to their best stock picks, we have found a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as beneficial, positive insider trading activity is another way to break down the financial markets. There are lots of motivations for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this tactic if investors understand where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action surrounding Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS).
Hedge fund activity in Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS)
At year’s end, a total of 6 of the hedge funds we track were long in this stock, a change of -14% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Jim Simons’s Renaissance Technologies had the largest position in Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS), worth close to $5 million, accounting for a small fraction of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $3 million position. Some other hedge funds that hold long positions include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Robert B. Gillam’s McKinley Capital Management.
Seeing as Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few funds that decided to sell off their positions entirely at the end of the year. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest stake of all the hedgies we monitor, comprising about $4 million in stock.. Louis Navellier’s fund, Navellier & Associates, also dropped its stock. These moves are interesting, as aggregate hedge fund interest was cut by one fund at the end of the year.
How have insiders been trading Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS)?
Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past 180 days. Over the latest six-month time frame, Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS). These stocks are Hanger Inc (NYSE:HGR), Acadia Healthcare Company Inc (NASDAQ:ACHC), HEALTHSOUTH Corp. (NYSE:HLS), Mednax Inc. (NYSE:MD), and DaVita HealthCare Partners Inc (NYSE:DVA). This group of stocks are in the specialized health services industry and their market caps are similar to FMS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Hanger Inc (NYSE:HGR)||9||0||13|
|Acadia Healthcare Company Inc (NASDAQ:ACHC)||17||1||16|
|HEALTHSOUTH Corp. (NYSE:HLS)||21||1||0|
|Mednax Inc. (NYSE:MD)||14||0||11|
|DaVita HealthCare Partners Inc (NYSE:DVA)||31||1||10|
With the results demonstrated by our strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) applies perfectly to this mantra.