Is Stryker Corporation (NYSE:SYK) a buy right now? Hedge funds are becoming hopeful. The number of long hedge fund bets went up by 2 in recent months.
If you’d ask most market participants, hedge funds are assumed to be underperforming, old investment tools of the past. While there are over 8000 funds trading at present, we at Insider Monkey choose to focus on the aristocrats of this group, around 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by watching their best stock picks, we have found a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Just as beneficial, optimistic insider trading activity is another way to break down the marketplace. As the old adage goes: there are plenty of incentives for an insider to cut shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if shareholders know where to look (learn more here).
With all of this in mind, let’s take a gander at the key action surrounding Stryker Corporation (NYSE:SYK).
Hedge fund activity in Stryker Corporation (NYSE:SYK)
At year’s end, a total of 30 of the hedge funds we track held long positions in this stock, a change of 7% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Yacktman Asset Management, managed by Donald Yacktman, holds the largest position in Stryker Corporation (NYSE:SYK). Yacktman Asset Management has a $661 million billion position in the stock, comprising 4% of its 13F portfolio. The second largest stake is held by Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $106 million position; 0% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.
As one would reasonably expect, key money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the largest position in Stryker Corporation (NYSE:SYK). Renaissance Technologies had 17 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also initiated a $13 million position during the quarter. The other funds with new positions in the stock are George Soros’s Soros Fund Management, Neil Chriss’s Hutchin Hill Capital, and Barton Biggs’s Traxis Partners.
How are insiders trading Stryker Corporation (NYSE:SYK)?
Insider buying is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time period, Stryker Corporation (NYSE:SYK) has experienced 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the returns exhibited by our strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Stryker Corporation (NYSE:SYK) is no exception.
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.