What’s a smart Smith & Nephew plc (ADR) (NYSE:SNN) investor to do?
To many of your peers, hedge funds are viewed as bloated, outdated investment vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation currently, Insider Monkey aim at the crème de la crème of this club, around 525 funds. It is widely held that this group has its hands on the majority of all hedge funds’ total assets, and by monitoring their best picks, we’ve brought to light a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as key, positive insider trading sentiment is another way to look at the financial markets. Obviously, there are a variety of stimuli for a bullish insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this method if you know what to do (learn more here).
Furthermore, let’s study the recent info for Smith & Nephew plc (ADR) (NYSE:SNN).
Hedge fund activity in Smith & Nephew plc (ADR) (NYSE:SNN)
At Q2’s end, a total of 7 of the hedge funds we track were long in this stock, a change of 17% from the first quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.
Out of the hedge funds we follow, Ken Fisher’s Fisher Asset Management had the biggest position in Smith & Nephew plc (ADR) (NYSE:SNN), worth close to $58.9 million, comprising 0.2% of its total 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $6.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include David Dreman’s Dreman Value Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Now, certain bigger names were leading the bulls’ herd. Fisher Asset Management, managed by Ken Fisher, initiated the biggest position in Smith & Nephew plc (ADR) (NYSE:SNN). Fisher Asset Management had 58.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $6.2 million investment in the stock during the quarter. The other funds with new positions in the stock are David Dreman’s Dreman Value Management, Jim Simons’s Renaissance Technologies, and D. E. Shaw’s D E Shaw.
How have insiders been trading Smith & Nephew plc (ADR) (NYSE:SNN)?
Bullish insider trading is at its handiest when the company in question has seen transactions within the past six months. Over the last 180-day time period, Smith & Nephew plc (ADR) (NYSE:SNN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Smith & Nephew plc (ADR) (NYSE:SNN). These stocks are Varian Medical Systems, Inc. (NYSE:VAR), Zimmer Holdings, Inc. (NYSE:ZMH), Edwards Lifesciences Corp (NYSE:EW), St. Jude Medical, Inc. (NYSE:STJ), and Boston Scientific Corporation (NYSE:BSX). This group of stocks are in the medical appliances & equipment industry and their market caps are closest to SNN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Varian Medical Systems, Inc. (NYSE:VAR)||20||0||0|
|Zimmer Holdings, Inc. (NYSE:ZMH)||31||0||0|
|Edwards Lifesciences Corp (NYSE:EW)||19||0||0|
|St. Jude Medical, Inc. (NYSE:STJ)||23||0||0|
|Boston Scientific Corporation (NYSE:BSX)||35||0||0|
Using the returns explained by Insider Monkey’s strategies, average investors should always track hedge fund and insider trading activity, and Smith & Nephew plc (ADR) (NYSE:SNN) is an important part of this process.