Taro Pharmaceutical Industries Ltd. (TARO) Gaps Open After Release of FY2016 Financial Results

Page 2 of 2

Consequently, some big names were breaking ground in TARO themselves. HealthInvest Partners AB assembled the biggest position in Taro Pharmaceutical Industries Ltd. (NYSE:TARO), having $13.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $4.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Ken Griffin’s Citadel Investment Group, and Cliff Asness’ AQR Capital Management.

Let’s now review hedge fund activity in other stocks similar to Taro Pharmaceutical Industries Ltd. (NYSE:TARO). We will take a look at American Campus Communities, Inc. (NYSE:ACC), China Southern Airlines Co Ltd (ADR) (NYSE:ZNH), Allegion PLC (NYSE:ALLE), and The Middleby Corporation (NASDAQ:MIDD). This group of stocks’ market valuations resemble TARO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ACC 19 163660 8
ZNH 4 18135 0
ALLE 32 891818 2
MIDD 16 346578 5

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $355 million. That figure was $169 million in TARO’s case. Allegion PLC (NYSE:ALLE) is the most popular stock in this table. On the other hand China Southern Airlines Co Ltd (ADR) (NYSE:ZNH) is the least popular one with only 4 bullish hedge fund positions. Taro Pharmaceutical Industries Ltd. (NYSE:TARO) 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 ALLE might be a better candidate to consider a long position.

Disclosure: None

Page 2 of 2