Express Scripts Holding Company (NASDAQ:ESRX) has experienced a decrease in hedge fund sentiment in recent months.
To most market participants, hedge funds are seen as unimportant, outdated financial tools of years past. While there are more than 8000 funds trading at present, we choose to focus on the crème de la crème of this group, close to 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry’s total capital, and by monitoring their highest performing stock picks, we have found a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading sentiment is a second way to break down the stock market universe. As the old adage goes: there are lots of motivations for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
Keeping this in mind, let’s take a look at the key action surrounding Express Scripts Holding Company (NASDAQ:ESRX).
What have hedge funds been doing with Express Scripts Holding Company (NASDAQ:ESRX)?
Heading into 2013, a total of 74 of the hedge funds we track held long positions in this stock, a change of -3% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Lee Ainslie’s Maverick Capital had the biggest position in Express Scripts Holding Company (NASDAQ:ESRX), worth close to $273 million, comprising 4% of its total 13F portfolio. Coming in second is Bain Capital of Brookside Capital, with a $262 million position; the fund has 5.9% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Michael Lowenstein’s Kensico Capital, Leon Cooperman’s Omega Advisors and Richard Perry’s Perry Capital.
Since Express Scripts Holding Company (NASDAQ:ESRX) has faced bearish sentiment from hedge fund managers, we can see that there exists a select few money managers who sold off their entire stakes last quarter. Interestingly, Stephen Mandel’s Lone Pine Capital dropped the biggest position of the 450+ funds we monitor, worth close to $270 million in stock., and George Soros of Soros Fund Management was right behind this move, as the fund dumped about $136 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds last quarter.
How have insiders been trading Express Scripts Holding Company (NASDAQ:ESRX)?
Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Express Scripts Holding Company (NASDAQ:ESRX) has seen 1 unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Express Scripts Holding Company (NASDAQ:ESRX) shareholders fit into this picture quite nicely.
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