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Should You Avoid Shire PLC (ADR) (SHPG)?

Judging by the fact that Shire PLC (ADR) (NASDAQ:SHPG) has witnessed a bearish sentiment from the smart money, logic holds that there were a few fund managers that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Doug Silverman and Alexander Klabin’s Senator Investment Group dropped the largest investment of all the hedgies tracked by Insider Monkey, totaling an estimated $66.4 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $27.2 million worth of shares. These transactions are important to note, as total hedge fund interest dropped by 1 fund by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Shire PLC (ADR) (NASDAQ:SHPG) but similarly valued. These stocks are Adobe Systems Incorporated (NASDAQ:ADBE), FedEx Corporation (NYSE:FDX), The Southern Company (NYSE:SO), and Carnival Corporation (NYSE:CCL). This group of stocks’ market valuations resembles Shire PLC (ADR) (NASDAQ:SHPG)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADBE 42 4069926 3
FDX 53 4136169 1
SO 17 360541 -2
CCL 53 2125468 4

As you can see, these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $2.67 billion. That figure was $2.50 billion in Shire PLC (ADR) (NASDAQ:SHPG)’s case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand, The Southern Company (NYSE:SO) is the least popular one with only 17 bullish hedge fund positions. Shire PLC (ADR) (NASDAQ:SHPG) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, FedEx Corporation (NYSE:FDX) might be a better candidate to consider a long position.

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