Is Amgen, Inc. (NASDAQ:AMGN) Going to Burn These Hedge Funds?

Amgen, Inc. (NASDAQ:AMGN) was in 28 hedge funds’ portfolio at the end of the fourth quarter of 2012. AMGN investors should pay attention to a decrease in support from the world’s most elite money managers recently. There were 30 hedge funds in our database with AMGN positions at the end of the previous quarter.

According to most investors, hedge funds are seen as unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the masters of this group, about 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by tracking their top investments, we have determined a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 25 percentage points in 6.5 month (see all of our picks from August).

Amgen, Inc. (NASDAQ:AMGN)Just as key, positive insider trading sentiment is a second way to break down the stock market universe. Obviously, there are many stimuli for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this tactic if piggybackers understand where to look (learn more here).

Keeping this in mind, let’s take a look at the key action encompassing Amgen, Inc. (NASDAQ:AMGN).

What does the smart money think about Amgen, Inc. (NASDAQ:AMGN)?

Heading into 2013, a total of 28 of the hedge funds we track were long in this stock, a change of -7% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Amgen, Inc. (NASDAQ:AMGN). AQR Capital Management has a $148 million position in the stock, comprising 0.7% of its 13F portfolio. On AQR Capital Management’s heels is David Cohen and Harold Levy of Iridian Asset Management, with a $129 million position; 1.5% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include D. E. Shaw’s D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Samuel Isaly’s OrbiMed Advisors.

Judging by the fact that Amgen, Inc. (NASDAQ:AMGN) has faced bearish sentiment from hedge fund managers, we can see that there exists a select few fund managers who sold off their positions entirely heading into 2013. Interestingly, Ric Dillon’s Diamond Hill Capital cut the biggest position of all the hedgies we monitor, totaling an estimated $104 million in stock., and JΘr⌠me Pfund and Michael Sj÷str÷m of Sectoral Asset Management was right behind this move, as the fund dumped about $56 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds heading into 2013.

How are insiders trading Amgen, Inc. (NASDAQ:AMGN)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Amgen, Inc. (NASDAQ:AMGN) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Amgen, Inc. (NASDAQ:AMGN) is no exception.

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