Henry Schein, Inc. (NASDAQ:HSIC) investors should be aware of a decrease in hedge fund sentiment recently.
To most investors, hedge funds are seen as slow, old financial tools of years past. While there are more than 8000 funds in operation today, we at Insider Monkey choose to focus on the upper echelon of this group, around 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by tracking their highest performing stock picks, we have deciphered 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 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as integral, bullish insider trading sentiment is another way to break down the marketplace. There are a variety of stimuli for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this method if “monkeys” know where to look (learn more here).
With these “truths” under our belt, it’s important to take a glance at the recent action regarding Henry Schein, Inc. (NASDAQ:HSIC).
How have hedgies been trading Henry Schein, Inc. (NASDAQ:HSIC)?
In preparation for this year, a total of 16 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, David Blood and Al Gore’s Generation Investment Management had the largest position in Henry Schein, Inc. (NASDAQ:HSIC), worth close to $339 million, accounting for 8% of its total 13F portfolio. On Generation Investment Management’s heels is Select Equity Group, managed by Robert Joseph Caruso, which held a $110 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Ken Fisher’s Fisher Asset Management, Mario Gabelli’s GAMCO Investors and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
Seeing as Henry Schein, Inc. (NASDAQ:HSIC) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few money managers that elected to cut their entire stakes heading into 2013. Interestingly, Clint Carlson’s Carlson Capital dropped the largest position of all the hedgies we key on, valued at close to $10 million in stock. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Henry Schein, Inc. (NASDAQ:HSIC)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, Henry Schein, Inc. (NASDAQ:HSIC) has experienced zero unique insiders buying, and 14 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey’s tactics, retail investors must always monitor hedge fund and insider trading activity, and Henry Schein, Inc. (NASDAQ:HSIC) 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.