Should You Buy St. Jude Medical, Inc. (STJ)?

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Due to the fact that St. Jude Medical, Inc. (NYSE:STJ) has experienced a falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few money managers who sold off their entire stakes in the third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest stake of the “upper crust” of funds followed by Insider Monkey, worth about $47.2 million in stock, and Conan Laughlin’s North Tide Capital was right behind this move, as the fund dumped about $36.5 million worth of shares. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as St. Jude Medical, Inc. (NYSE:STJ) but similarly valued. These stocks are Analog Devices, Inc. (NASDAQ:ADI), Spectra Energy Corp. (NYSE:SE), Tyson Foods, Inc. (NYSE:TSN), and Telekomunikasi Indns Tbk Prshn PP PT-ADR (NYSE:TLK). This group of stocks’ market caps is closest to St. Jude Medical, Inc. (NYSE:STJ)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADI 32 1189511 5
SE 24 146526 2
TSN 46 1810004 -4
TLK 9 28359 0

As you can see, these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $794 million. That figure was $600 million in St. Jude Medical, Inc. (NYSE:STJ)’s case. Tyson Foods, Inc. (NYSE:TSN) is the most popular stock in this table. On the other hand, Telekomunikasi Indns Tbk Prshn PP PT-ADR (NYSE:TLK) is the least popular one with only 9 bullish hedge fund positions. St. Jude Medical, Inc. (NYSE:STJ) 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, Tyson Foods, Inc. (NYSE:TSN) might be a better candidate to consider a long position.

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