Zimmer Holdings, Inc. (NYSE:ZMH) was in 31 hedge funds’ portfolio at the end of the first quarter of 2013. ZMH investors should pay attention to a decrease in enthusiasm from smart money of late. There were 32 hedge funds in our database with ZMH positions at the end of the previous quarter.
In the eyes of most market participants, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are greater than 8000 funds trading at the moment, we at Insider Monkey choose to focus on the bigwigs of this club, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by tracking their top equity investments, we have revealed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, bullish insider trading activity is a second way to parse down the financial markets. There are a variety of stimuli for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the key action surrounding Zimmer Holdings, Inc. (NYSE:ZMH).
What does the smart money think about Zimmer Holdings, Inc. (NYSE:ZMH)?
At Q1’s end, a total of 31 of the hedge funds we track were bullish in this stock, a change of -3% from the previous quarter.
Because Zimmer Holdings, Inc. (NYSE:ZMH) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of fund managers that elected to cut their entire stakes at the end of the first quarter. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the largest position of the 450+ funds we key on, totaling an estimated $12.6 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund dumped about $9.6 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds at the end of the first quarter.
How are insiders trading Zimmer Holdings, Inc. (NYSE:ZMH)?
Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time period, Zimmer Holdings, Inc. (NYSE:ZMH) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Zimmer Holdings, Inc. (NYSE:ZMH). These stocks are Intuitive Surgical, Inc. (NASDAQ:ISRG), Edwards Lifesciences Corp (NYSE:EW), Smith & Nephew plc (ADR) (NYSE:SNN), Boston Scientific Corporation (NYSE:BSX), and St. Jude Medical, Inc. (NYSE:STJ). This group of stocks belong to the medical appliances & equipment industry and their market caps are closest to ZMH’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Intuitive Surgical, Inc. (NASDAQ:ISRG)||35||0||7|
|Edwards Lifesciences Corp (NYSE:EW)||21||2||8|
|Smith & Nephew plc (ADR) (NYSE:SNN)||6||0||0|
|Boston Scientific Corporation (NYSE:BSX)||38||1||0|
|St. Jude Medical, Inc. (NYSE:STJ)||27||0||11|
With the returns shown by Insider Monkey’s studies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Zimmer Holdings, Inc. (NYSE:ZMH) applies perfectly to this mantra.