Is Novo Nordisk A/S (ADR) (NVO) Going to Burn These Hedge Funds?

Judging by the fact that Novo Nordisk A/S (ADR) (NYSE:NVO) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers that slashed their entire stakes by the end of the third quarter. It’s worth mentioning that Peter Muller’s PDT Partners cut the largest stake of all the hedgies monitored by Insider Monkey, worth about $3.7 million in stock. David Costen Haley’s fund, HBK Investments, also sold off its stock, about $3.2 million worth.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Novo Nordisk A/S (ADR) (NYSE:NVO) but similarly valued. We will take a look at Intel Corporation (NASDAQ:INTC), Comcast Corporation (NASDAQ:CMCSA), International Business Machines Corp. (NYSE:IBM), and Merck & Co., Inc. (NYSE:MRK). This group of stocks’ market valuations resemble NVO’s market valuation.

As you can see these stocks had an average of 63 hedge funds with bullish positions and the average amount invested in these stocks was $6.70 billion. That figure was $1.83 billion in NVO’s case. Comcast Corporation (NASDAQ:CMCSA) is the most popular stock in this table, while Intel Corporation (NASDAQ:INTC) is the least popular one with only 45 bullish hedge fund positions. Compared to these stocks, Novo Nordisk A/S (ADR) (NYSE:NVO) is even less popular than INTC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.