Pfizer Inc. (NYSE:PFE) was in 81 hedge funds’ portfolio at the end of the first quarter of 2013. PFE shareholders have witnessed an increase in hedge fund interest recently. There were 78 hedge funds in our database with PFE positions at the end of the previous quarter.
According to most market participants, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds in operation today, we choose to focus on the bigwigs of this group, about 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total asset base, and by watching their highest performing equity investments, we have formulated a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, positive insider trading sentiment is a second way to break down the stock market universe. There are a number of reasons for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this tactic if shareholders understand what to do (learn more here).
Keeping this in mind, it’s important to take a glance at the key action regarding Pfizer Inc. (NYSE:PFE).
What have hedge funds been doing with Pfizer Inc. (NYSE:PFE)?
At Q1’s end, a total of 81 of the hedge funds we track were long in this stock, a change of 4% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
According to our comprehensive database, Ken Fisher’s Fisher Asset Management had the biggest position in Pfizer Inc. (NYSE:PFE), worth close to $886.3 million, accounting for 2.4% of its total 13F portfolio. Coming in second is Discovery Capital Management, managed by Rob Citrone, which held a $508.1 million position; the fund has 6.8% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Donald Yacktman’s Yacktman Asset Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Donald Chiboucis’s Columbus Circle Investors.
Now, specific money managers have jumped into Pfizer Inc. (NYSE:PFE) headfirst. Mason Capital Management, managed by Kenneth Mario Garschina, assembled the largest position in Pfizer Inc. (NYSE:PFE). Mason Capital Management had 165.4 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $52.7 million investment in the stock during the quarter. The following funds were also among the new PFE investors: Matthew Tewksbury’s Stevens Capital Management, Charles Clough’s Clough Capital Partners, and Howard Guberman’s Gruss Asset Management.
Insider trading activity in Pfizer Inc. (NYSE:PFE)
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the last six-month time period, Pfizer Inc. (NYSE:PFE) has seen zero unique insiders buying, and 11 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Pfizer Inc. (NYSE:PFE). These stocks are GlaxoSmithKline plc (ADR) (NYSE:GSK), Merck & Co., Inc. (NYSE:MRK), Sanofi SA (ADR) (NYSE:SNY), Johnson & Johnson (NYSE:JNJ), and Novartis AG (ADR) (NYSE:NVS). This group of stocks are the members of the drug manufacturers – major industry and their market caps match PFE’s market cap.