Sanofi SA (ADR) (NYSE:SNY) was in 45 hedge funds' portfolio at the end of the fourth quarter of 2012. SNY has experienced a decrease in hedge fund sentiment lately. There were 57 hedge funds in our database with SNY holdings at the end of the previous quarter.
In the eyes of most investors, hedge funds are assumed to be slow, outdated financial tools of the past. While there are greater than 8000 funds trading at present, we hone in on the top tier of this group, close to 450 funds. It is estimated that this group has its hands on the lion's share of all hedge funds' total capital, and by watching their highest performing equity investments, we have deciphered a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as key, optimistic insider trading activity is another way to break down the marketplace. Just as you'd expect, there are plenty of incentives for an insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).
Keeping this in mind, it's important to take a glance at the latest action regarding Sanofi SA (ADR) (NYSE:SNY).
At the end of the fourth quarter, a total of 45 of the hedge funds we track were bullish in this stock, a change of -21% from one quarter earlier. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Ken Fisher's Fisher Asset Management had the biggest position in Sanofi SA (ADR) (NYSE:SNY), worth close to $624 million, accounting for 1.7% of its total 13F portfolio. On Fisher Asset Management's heels is Warren Buffett of Berkshire Hathaway, with a $193 million position; 6% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include David Abrams's Abrams Capital Management, Martin D. Sass's MD Sass and Jean-Marie Eveillard's First Eagle Investment Management.
Due to the fact that Sanofi SA (ADR) (NYSE:SNY) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of fund managers that slashed their positions entirely last quarter. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital cut the largest investment of the 450+ funds we key on, comprising about $78 million in stock.. Gifford Combs's fund, Dalton Investments, also cut its call options., about $19 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 12 funds last quarter.
Insider buying is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, Sanofi SA (ADR) (NYSE:SNY) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey's studies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Sanofi SA (ADR) (NYSE:SNY) is an important part of this process.
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.