West Pharmaceutical Services Inc. (NYSE:WST) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. WST has experienced a decrease in activity from the world’s largest hedge funds recently. There were 10 hedge funds in our database with WST holdings at the end of the previous quarter.
In the eyes of most traders, hedge funds are assumed to be worthless, old financial tools of the past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey hone in on the crème de la crème of this group, around 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by paying attention to their highest performing stock picks, we have figured out a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. Obviously, there are plenty of reasons for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).
With all of this in mind, let’s take a look at the recent action encompassing West Pharmaceutical Services Inc. (NYSE:WST).
How have hedgies been trading West Pharmaceutical Services Inc. (NYSE:WST)?
At the end of the fourth quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -10% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Ken Fisher’s Fisher Asset Management had the most valuable position in West Pharmaceutical Services Inc. (NYSE:WST), worth close to $35 million, comprising 0.1% of its total 13F portfolio. On Fisher Asset Management’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $2 million position; 0% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Israel Englander’s Millennium Management, Steven Cohen’s SAC Capital Advisors and Ken Griffin’s Citadel Investment Group.
Because West Pharmaceutical Services Inc. (NYSE:WST) has faced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedgies that decided to sell off their positions entirely heading into 2013. At the top of the heap, D. E. Shaw’s D E Shaw dumped the biggest position of the 450+ funds we key on, totaling close to $2 million in stock.. Joel Greenblatt’s fund, Gotham Asset Management, also sold off its stock, about $2 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds heading into 2013.
How have insiders been trading West Pharmaceutical Services Inc. (NYSE:WST)?
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, West Pharmaceutical Services Inc. (NYSE:WST) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to West Pharmaceutical Services Inc. (NYSE:WST). These stocks are Teleflex Incorporated (NYSE:TFX), HeartWare International Inc (NASDAQ:HTWR), Hill-Rom Holdings, Inc. (NYSE:HRC), Haemonetics Corporation (NYSE:HAE), and Thoratec Corporation (NASDAQ:THOR). All of these stocks are in the medical instruments & supplies industry and their market caps match WST’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Teleflex Incorporated (NYSE:TFX)||16||0||0|
|HeartWare International Inc (NASDAQ:HTWR)||13||0||10|
|Hill-Rom Holdings, Inc. (NYSE:HRC)||17||0||4|
|Haemonetics Corporation (NYSE:HAE)||12||4||10|
|Thoratec Corporation (NASDAQ:THOR)||18||0||5|
With the returns exhibited by Insider Monkey’s strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and West Pharmaceutical Services Inc. (NYSE:WST) shareholders fit into this picture quite nicely.