Is St. Jude Medical, Inc. (NYSE:STJ) Going to Burn These Hedge Funds?

St. Jude Medical, Inc. (NYSE:STJ) was in 27 hedge funds’ portfolio at the end of December. STJ shareholders have witnessed a decrease in enthusiasm from smart money of late. There were 28 hedge funds in our database with STJ holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of methods shareholders can use to track publicly traded companies. A couple of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can beat the S&P 500 by a very impressive amount (see just how much).

Equally as key, optimistic insider trading activity is a second way to parse down the marketplace. There are a number of stimuli for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the valuable potential of this method if investors understand where to look (learn more here).

With all of this in mind, let’s take a glance at the key action encompassing St. Jude Medical, Inc. (NYSE:STJ).

What have hedge funds been doing with St. Jude Medical, Inc. (NYSE:STJ)?

At the end of the fourth quarter, a total of 27 of the hedge funds we track were bullish in this stock, a change of -4% from the third quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably.

When looking at the hedgies we track, Phill Gross and Robert Atchinson’s Adage Capital Management had the largest position in St. Jude Medical, Inc. (NYSE:STJ), worth close to $112 million, comprising 0.4% of its total 13F portfolio. The second largest stake is held by John W. Rogers of Ariel Investments, with a $49 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include James E. Flynn’s Deerfield Management, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Judging by the fact that St. Jude Medical, Inc. (NYSE:STJ) has faced declining sentiment from hedge fund managers, we can see that there were a few hedgies that decided to sell off their entire stakes at the end of the year. Intriguingly, James E. Flynn’s Deerfield Management said goodbye to the largest stake of the “upper crust” of funds we monitor, totaling an estimated $13 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund dumped about $13 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds at the end of the year.

What do corporate executives and insiders think about St. Jude Medical, Inc. (NYSE:STJ)?

Bullish insider trading is most useful when the company in focus has experienced transactions within the past six months. Over the latest six-month time period, St. Jude Medical, Inc. (NYSE:STJ) has seen 1 unique insiders buying, and 9 insider sales (see the details of insider trades here).

With the results demonstrated by Insider Monkey’s studies, retail investors should always monitor hedge fund and insider trading activity, and St. Jude Medical, Inc. (NYSE:STJ) shareholders fit into this picture quite nicely.

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