This Metric Says You Are Smart to Sell Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) investors should pay attention to a decrease in support from the world’s most elite money managers of late.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

To most stock holders, hedge funds are viewed as slow, old financial vehicles of years past. While there are over 8000 funds in operation at present, we at Insider Monkey look at the bigwigs of this group, close to 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total capital, and by monitoring their best equity investments, we have come up with a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Equally as beneficial, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are lots of stimuli for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this method if “monkeys” understand what to do (learn more here).

Consequently, it’s important to take a gander at the latest action regarding Valeant Pharmaceuticals Intl Inc (NYSE:VRX).

What does the smart money think about Valeant Pharmaceuticals Intl Inc (NYSE:VRX)?

Heading into 2013, a total of 34 of the hedge funds we track were long in this stock, a change of -17% from the third quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes significantly.

Of the funds we track, ValueAct Capital, managed by Jeffrey Ubben, holds the biggest position in Valeant Pharmaceuticals Intl Inc (NYSE:VRX). ValueAct Capital has a $1.05 billion position in the stock, comprising 13.4% of its 13F portfolio. On ValueAct Capital’s heels is Glenn Greenberg of Brave Warrior Capital, with a $375 million position; the fund has 22.5% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Andreas Halvorsen’s Viking Global, David Cohen and Harold Levy’s Iridian Asset Management and Peter Adam Hochfelder’s Brahman Capital.

Judging by the fact that Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has witnessed bearish sentiment from hedge fund managers, logic holds that there is a sect of funds who sold off their entire stakes heading into 2013. Intriguingly, Lee Ainslie’s Maverick Capital dropped the largest position of the “upper crust” of funds we watch, comprising close to $58 million in stock.. Peter J. Eichler Jr.’s fund, Aletheia Research and Management, also said goodbye to its stock, about $26 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 7 funds heading into 2013.

How are insiders trading Valeant Pharmaceuticals Intl Inc (NYSE:VRX)?

Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time period, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has seen 4 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the results demonstrated by Insider Monkey’s time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 9 Most Dangerous Countries for Tourists to Visit

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!