Teva Pharmaceutical Industries Ltd (ADR) (TEVA): Hedge Funds and Insiders Are Bearish, What Should You Do?

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Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) was in 47 hedge funds’ portfolio at the end of March. TEVA has experienced a decrease in hedge fund sentiment of late. There were 49 hedge funds in our database with TEVA positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are many methods investors can use to monitor the equity markets. A pair of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outclass their index-focused peers by a superb amount (see just how much).

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)Just as important, bullish insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are many incentives for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if shareholders know where to look (learn more here).

Now, it’s important to take a gander at the key action surrounding Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA).

Hedge fund activity in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)

At Q1’s end, a total of 47 of the hedge funds we track were bullish in this stock, a change of -4% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Matt Sirovich and Jeremy Mindich’s Scopia Capital had the largest position in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), worth close to $112.1 million, accounting for 3.9% of its total 13F portfolio. Sitting at the No. 2 spot is David Abrams of Abrams Capital Management, with a $101.6 million position; the fund has 9.8% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Bernard Horn’s Polaris Capital Management, James E. Flynn’s Deerfield Management and Jim Simons’s Renaissance Technologies.

Seeing as Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has faced bearish sentiment from hedge fund managers, it’s easy to see that there were a few fund managers that elected to cut their positions entirely last quarter. It’s worth mentioning that Richard Perry’s Perry Capital dropped the biggest position of the “upper crust” of funds we watch, valued at about $87.5 million in call options, and Jeffrey Altman of Owl Creek Asset Management was right behind this move, as the fund cut about $79 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds last quarter.

What have insiders been doing with Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)?

Bullish insider trading is best served when the primary stock in question has experienced transactions within the past six months. Over the last 180-day 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).

Let’s also review hedge fund and insider activity in other stocks similar to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). These stocks are Dr. Reddy’s Laboratories Limited (ADR) (NYSE:RDY), Pharmacyclics, Inc. (NASDAQ:PCYC), Forest Laboratories, Inc. (NYSE:FRX), Novo Nordisk A/S (ADR) (NYSE:NVO), and Allergan, Inc. (NYSE:AGN). All of these stocks are in the drug manufacturers – other industry and their market caps match TEVA’s market cap.

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