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Should You Buy Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)?

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) investors should be aware of an increase in enthusiasm from smart money lately.

In the financial world, there are plenty of indicators shareholders can use to track the equity markets. 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 top picks of the best money managers can outpace the market by a significant margin (see just how much).

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)

Equally as beneficial, positive insider trading activity is another way to parse down the marketplace. There are a number of incentives for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if shareholders know what to do (learn more here).

Now, let’s take a peek at the key action surrounding Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA).

How have hedgies been trading Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)?

At the end of the fourth quarter, a total of 46 of the hedge funds we track were long in this stock, a change of 2% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, David Abrams’s Abrams Capital Management had the most valuable position in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), worth close to $96 million, accounting for 8.7% of its total 13F portfolio. On Abrams Capital Management’s heels is Richard Perry of Perry Capital, with a $87 million call position; 2% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Jeffrey Altman’s Owl Creek Asset Management, Israel Englander’s Millennium Management and Bernard Horn’s Polaris Capital Management.

As one would reasonably expect, key hedge funds have been driving this bullishness. Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, created the largest position in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). Scopia Capital had 49 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $9 million position during the quarter. The following funds were also among the new TEVA investors: Kevin Kotler’s Broadfin Capital, Brian Ashford-Russell and Tim Woolley’s Polar Capital, and Glenn Russell Dubin’s Highbridge Capital Management.

Insider trading activity in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)

Insider purchases made by high-level executives is best served when the primary stock in question has seen transactions within the past six months. Over the latest six-month time frame, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the results exhibited by Insider Monkey’s research, retail investors must always watch hedge fund and insider trading sentiment, and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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