Hedge Funds Aren’t Crazy About Novartis AG (ADR) (NVS) Anymore

Because Novartis AG (ADR) (NYSE:NVS) has experienced a falling interest from hedge fund managers, we can see that there lies a certain “tier” of funds who sold off their full holdings by the end of the third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management cut the biggest investment of the 700 funds tracked by Insider Monkey, worth an estimated $4.9 million in stock. Vishal Saluja and Pham Quang’s fund, Endurant Capital Management, also cut its stock, about $4.2 million worth of shares. These transactions are important to note, as aggregate hedge fund interest was cut by 6 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Novartis AG (ADR) (NYSE:NVS) but similarly valued. We will take a look at Wal-Mart Stores, Inc. (NYSE:WMT), AT&T Inc. (NYSE:T), Procter & Gamble Co (NYSE:PG), and Pfizer Inc. (NYSE:PFE). This group of stocks’ market caps is similar to Novartis AG (ADR) (NYSE:NVS)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WMT 61 7088996 -4
T 60 3758951 11
PG 58 9063165 0
PFE 97 6090993 12

As you can see, these stocks had an average of 69 hedge funds with bullish positions and the average amount invested in these stocks was $6.50 billion. That figure was $1.01 billion in Novartis AG (ADR) (NYSE:NVS)’s case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand, Procter & Gamble Co (NYSE:PG) is the least popular one with only 58 bullish hedge fund positions. Compared to these stocks, Novartis AG (ADR) (NYSE:NVS) is even less popular than Procter & Gamble Co (NYSE:PG). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.