Pfizer Inc. (NYSE:PFE) has seen a decrease in hedge fund sentiment lately.
In the eyes of most market participants, hedge funds are perceived as underperforming, old financial tools of yesteryear. While there are greater than 8000 funds with their doors open today, we at Insider Monkey look at the elite of this club, around 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by keeping an eye on their best equity investments, we have formulated a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as important, positive insider trading sentiment is a second way to parse down the financial markets. There are a number of reasons for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if you know where to look (learn more here).
Keeping this in mind, we’re going to take a glance at the latest action surrounding Pfizer Inc. (NYSE:PFE).
What does the smart money think about Pfizer Inc. (NYSE:PFE)?
Heading into 2013, a total of 77 of the hedge funds we track were bullish in this stock, a change of -5% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the biggest position in Pfizer Inc. (NYSE:PFE), worth close to $797 million, comprising 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is Rob Citrone of Discovery Capital Management, with a $428 million position; 4.8% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Donald Yacktman’s Yacktman Asset Management, Donald Chiboucis’s Columbus Circle Investors and Christopher MedlockáJames’s Partner Fund Management.
Since Pfizer Inc. (NYSE:PFE) has experienced a declination in interest from the smart money, it’s easy to see that there were a few hedgies who sold off their full holdings at the end of the year. It’s worth mentioning that Richard Schimel’s Diamondback Capital said goodbye to the biggest investment of all the hedgies we key on, totaling close to $49 million in stock., and Ryan Heslop and Ariel Warszawski of Firefly Value Partners was right behind this move, as the fund cut about $35 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 4 funds at the end of the year.
How are insiders trading Pfizer Inc. (NYSE:PFE)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time frame, Pfizer Inc. (NYSE:PFE) has experienced zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
With the returns shown by our studies, retail investors must always keep an eye on hedge fund and insider trading activity, and Pfizer Inc. (NYSE:PFE) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.