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Hedge Funds Aren’t Crazy About Hospira, Inc. (HSP) Anymore

Hospira, Inc. (NYSE:HSP) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months.

At the moment, there are many indicators market participants can use to monitor their holdings. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can outclass the broader indices by a very impressive margin (see just how much).

Hospira, Inc. (NYSE:HSP)Just as beneficial, bullish insider trading activity is a second way to break down the stock market universe. There are a variety of stimuli for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).

Now, it’s important to take a gander at the key action surrounding Hospira, Inc. (NYSE:HSP).

What does the smart money think about Hospira, Inc. (NYSE:HSP)?

Heading into Q2, a total of 21 of the hedge funds we track were long in this stock, a change of -13% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Ariel Investments, managed by John W. Rogers, holds the largest position in Hospira, Inc. (NYSE:HSP). Ariel Investments has a $139.8 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Larry Robbins of Glenview Capital, with a $123.6 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Thomas Ellis and Todd Hammer’s North Run Capital, and Richard S. Pzena’s Pzena Investment Management.

Judging by the fact that Hospira, Inc. (NYSE:HSP) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedgies who were dropping their full holdings at the end of the first quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies dropped the biggest position of the “upper crust” of funds we watch, valued at about $19.2 million in stock.. Malcolm Fairbairn’s fund, Ascend Capital, also dumped its stock, about $14.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds at the end of the first quarter.

How are insiders trading Hospira, Inc. (NYSE:HSP)?

Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time frame, Hospira, Inc. (NYSE:HSP) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Hospira, Inc. (NYSE:HSP). These stocks are Delcath Systems, Inc. (NASDAQ:DCTH), Petmed Express Inc (NASDAQ:PETS), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Alkermes Plc (NASDAQ:ALKS), and Elan Corporation, plc (ADR) (NYSE:ELN). This group of stocks are in the drug delivery industry and their market caps match HSP’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Delcath Systems, Inc. (NASDAQ:DCTH) 4 0 0
Petmed Express Inc (NASDAQ:PETS) 11 0 2
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) 37 1 0
Alkermes Plc (NASDAQ:ALKS) 15 0 10
Elan Corporation, plc (ADR) (NYSE:ELN) 33 0 0

With the results shown by Insider Monkey’s research, retail investors must always keep an eye on hedge fund and insider trading activity, and Hospira, Inc. (NYSE:HSP) is no exception.

Click here to learn why you should track hedge funds

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