WellPoint, Inc. (NYSE:WLP) has experienced a decrease in activity from the world’s largest hedge funds of late.
According to most stock holders, hedge funds are viewed as underperforming, old financial vehicles of the past. While there are greater than 8000 funds trading at present, we at Insider Monkey look at the masters of this group, close to 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total asset base, and by tracking their top investments, we have discovered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to parse down the stock market universe. Obviously, there are a variety of incentives for an executive to downsize shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
With all of this in mind, it’s important to take a gander at the latest action regarding WellPoint, Inc. (NYSE:WLP).
Hedge fund activity in WellPoint, Inc. (NYSE:WLP)
At the end of the fourth quarter, a total of 43 of the hedge funds we track were long in this stock, a change of -19% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Orbis Investment Management, managed by William B. Gray, holds the most valuable position in WellPoint, Inc. (NYSE:WLP). Orbis Investment Management has a $708 million position in the stock, comprising 7% of its 13F portfolio. On Orbis Investment Management’s heels is Jean-Marie Eveillard of First Eagle Investment Management, with a $377 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Donald Yacktman’s Yacktman Asset Management, Alan Fournier’s Pennant Capital Management and Paul ReederáandáEdward Shapiro’s PAR Capital Management.
Because WellPoint, Inc. (NYSE:WLP) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedgies that slashed their positions entirely last quarter. Intriguingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC dumped the biggest stake of all the hedgies we key on, valued at about $155 million in stock.. Dan Loeb’s fund, Third Point, also said goodbye to its stock, about $73 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 10 funds last quarter.
What do corporate executives and insiders think about WellPoint, Inc. (NYSE:WLP)?
Insider buying is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time frame, WellPoint, Inc. (NYSE:WLP) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the results shown by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and WellPoint, Inc. (NYSE:WLP) shareholders fit into this picture quite nicely.
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.