Sanofi SA (ADR) (NYSE:SNY) has experienced an increase in hedge fund sentiment lately.
To most investors, hedge funds are seen as slow, outdated financial vehicles of the past. While there are more than 8000 funds in operation at the moment, we look at the leaders of this group, around 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by keeping an eye on their highest performing stock picks, we have formulated a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as important, positive insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are lots of incentives for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
Consequently, let’s take a look at the key action surrounding Sanofi SA (ADR) (NYSE:SNY).
How have hedgies been trading Sanofi SA (ADR) (NYSE:SNY)?
In preparation for this quarter, a total of 53 of the hedge funds we track were bullish in this stock, a change of 13% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Sanofi SA (ADR) (NYSE:SNY). Fisher Asset Management has a $656.8 million position in the stock, comprising 1.7% of its 13F portfolio. Coming in second is Berkshire Hathaway, managed by Warren Buffett, which held a $207.6 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Martin D. Sass’s MD Sass, David Abrams’s Abrams Capital Management and Jean-Marie Eveillard’s First Eagle Investment Management.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the most outsized position in Sanofi SA (ADR) (NYSE:SNY). Arrowstreet Capital had 40.8 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated a $11.7 million position during the quarter. The following funds were also among the new SNY investors: Jeffrey Vinik’s Vinik Asset Management, Jacob Gottlieb’s Visium Asset Management, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.
How are insiders trading Sanofi SA (ADR) (NYSE:SNY)?
Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the latest half-year time period, Sanofi SA (ADR) (NYSE:SNY) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Sanofi SA (ADR) (NYSE:SNY). These stocks are Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), Novartis AG (ADR) (NYSE:NVS), GlaxoSmithKline plc (ADR) (NYSE:GSK), and Merck & Co., Inc. (NYSE:MRK). All of these stocks are in the drug manufacturers – major industry and their market caps resemble SNY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Johnson & Johnson (NYSE:JNJ) | 65 | 0 | 2 |
| Pfizer Inc. (NYSE:PFE) | 81 | 0 | 11 |
| Novartis AG (ADR) (NYSE:NVS) | 24 | 0 | 0 |
| GlaxoSmithKline plc (ADR) (NYSE:GSK) | 18 | 0 | 0 |
| Merck & Co., Inc. (NYSE:MRK) | 56 | 0 | 4 |
With the results demonstrated by Insider Monkey’s studies, everyday investors should always monitor hedge fund and insider trading activity, and Sanofi SA (ADR) (NYSE:SNY) applies perfectly to this mantra.
