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Who’s Dumping Teva Pharmaceutical Industries Ltd (ADR) (TEVA)?

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Like most pharma companies, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)’s stock price generally trades akin to the actions of a roller coaster. So is it on its way up this time, or down?

To many investors, hedge funds are assumed to be overrated, old financial tools of a period lost to current times. Although there are In excess of 8,000 hedge funds trading today, this site focuses on the upper echelon of this group, around 525 funds. Analysts calculate that this group controls the lion’s share of the smart money’s total assets, and by paying attention to their highest performing picks, we’ve revealed a few investment strategies that have historically outstripped the S&P 500. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as necessary, optimistic insider trading sentiment is a second way to analyze the marketplace. Just as you’d expect, there are plenty of stimuli for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).

Keeping this in mind, let’s analyze the recent info for Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA).

Hedge fund activity in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)

Heading into Q3, a total of 43 of the hedge funds we track were long in this stock, a change of -9% from the first quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully.

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)Out of the hedge funds we follow, Matt Sirovich and Jeremy Mindich’s Scopia Capital had the biggest position in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), worth close to $137.4 million, comprising 3.8% of its total 13F portfolio. On Scopia Capital’s heels is David Abrams of Abrams Capital Management, with a $100.4 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Bernard Horn’s Polaris Capital Management, Jonathon Jacobson’s Highfields Capital Management and Matt Sirovich and Jeremy Mindich’s Scopia Capital.

Since Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that slashed their entire stakes at the end of the second quarter. At the top of the heap, Mark Kingdon’s Kingdon Capital said goodbye to the biggest position of all the hedgies we watch, valued at an estimated $15.9 million in call options., and Daniel Arbess of Xerion was right behind this move, as the fund dumped about $15.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds at the end of the second quarter.

What have insiders been doing with Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). These stocks are Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY), Pharmacyclics, Inc. (NASDAQ:PCYC), Forest Laboratories, Inc. (NYSE:FRX), Novo Nordisk A/S (ADR) (NYSE:NVO), and Allergan, Inc. (NYSE:AGN). All of these stocks are in the drug manufacturers – other industry and their market caps are closest to TEVA’s market cap.

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