Is Alere Inc (NYSE:ALR) undervalued? Investors who are in the know are in a bearish mood. The number of bullish hedge fund bets decreased by 3 lately.
At the moment, there are dozens of metrics shareholders can use to monitor their holdings. A pair of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outclass their index-focused peers by a very impressive margin (see just how much).
Equally as beneficial, bullish insider trading activity is a second way to parse down the marketplace. Obviously, there are many incentives for an executive to drop shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
Consequently, it’s important to take a glance at the key action surrounding Alere Inc (NYSE:ALR).
Hedge fund activity in Alere Inc (NYSE:ALR)
At Q1’s end, a total of 25 of the hedge funds we track held long positions in this stock, a change of -11% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Oaktree Capital Management, managed by Howard Marks, holds the biggest position in Alere Inc (NYSE:ALR). Oaktree Capital Management has a $44.2 million position in the stock, comprising 0.9% of its 13F portfolio. On Oaktree Capital Management’s heels is Private Capital Management, managed by Gregg J. Powers, which held a $41.3 million position; 4% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Stephen DuBois’s Camber Capital Management, Matt Sirovich and Jeremy Mindich’s Scopia Capital and Quincy Lee’s Ancient Art (Teton Capital).
Since Alere Inc (NYSE:ALR) has experienced declining sentiment from the smart money, it’s safe to say that there was a specific group of hedgies who sold off their entire stakes last quarter. Interestingly, William B. Gray’s Orbis Investment Management dumped the biggest investment of all the hedgies we key on, worth about $45.4 million in stock., and Eric Edidin and Josh Lobel of Archer Capital Management was right behind this move, as the fund cut about $3.1 million worth. These moves are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.
What have insiders been doing with Alere Inc (NYSE:ALR)?
Insider buying is most useful when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time period, Alere Inc (NYSE:ALR) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Alere Inc (NYSE:ALR). These stocks are PerkinElmer, Inc. (NYSE:PKI), WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX), PAREXEL International Corporation (NASDAQ:PRXL), ICON plc – Ordinary Shares (NASDAQ:ICLR), and Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD). This group of stocks belong to the medical laboratories & research industry and their market caps are similar to ALR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|PerkinElmer, Inc. (NYSE:PKI)||29||0||8|
|WuXi PharmaTech (Cayman) Inc. (ADR) (NYSE:WX)||13||0||0|
|PAREXEL International Corporation (NASDAQ:PRXL)||12||0||14|
|ICON plc – Ordinary Shares (NASDAQ:ICLR)||20||0||0|
|Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)||11||0||3|
With the results demonstrated by Insider Monkey’s strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Alere Inc (NYSE:ALR) shareholders fit into this picture quite nicely.