PharMerica Corporation (PMC): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

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PharMerica Corporation (NYSE:PMC) investors should be aware of an increase in support from the world’s most elite money managers in recent months.

David Shaw

In the 21st century investor’s toolkit, there are dozens of metrics shareholders can use to watch stocks. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can trounce their index-focused peers by a healthy amount (see just how much).

Just as integral, bullish insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are a number of motivations for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand what to do (learn more here).

Consequently, we’re going to take a gander at the latest action encompassing PharMerica Corporation (NYSE:PMC).

Hedge fund activity in PharMerica Corporation (NYSE:PMC)

Heading into 2013, a total of 12 of the hedge funds we track were long in this stock, a change of 20% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.

When looking at the hedgies we track, D. E. Shaw’s D E Shaw had the most valuable position in PharMerica Corporation (NYSE:PMC), worth close to $11 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $4.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Jacob Gottlieb’s Visium Asset Management and Joel Greenblatt’s Gotham Asset Management.

Consequently, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the biggest position in PharMerica Corporation (NYSE:PMC). Citadel Investment Group had 0.4 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also made a $0.4 million investment in the stock during the quarter. The other funds with brand new PMC positions are Neil Chriss’s Hutchin Hill Capital and Paul Tudor Jones’s Tudor Investment Corp.

How are insiders trading PharMerica Corporation (NYSE:PMC)?

Insider buying is best served when the company in question has experienced transactions within the past 180 days. Over the latest six-month time frame, PharMerica Corporation (NYSE:PMC) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to PharMerica Corporation (NYSE:PMC). These stocks are  GNC Holdings Inc (NYSE:GNC), Rite Aid Corporation (NYSE:RAD), China Nepstar Chain Drugstore Ltd.(ADR) (NYSE:NPD), and BioScrip Inc. (NASDAQ:BIOS). This group of stocks are in the drug stores industry and their market caps are similar to PMC’s market cap.

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