Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Novartis AG (ADR) (NYSE:NVS) from the perspective of those elite funds.
Novartis AG (ADR) (NYSE:NVS) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. NVS was in 26 hedge funds’ portfolios at the end of the third quarter of 2016. There were 22 hedge funds in our database with NVS positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The Coca-Cola Company (NYSE:KO), Oracle Corporation (NASDAQ:ORCL), and Fomento Economico Mexicano SAB (ADR) (NYSE:FMX) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about Novartis AG (ADR) (NYSE:NVS)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, up by 18% from one quarter earlier and pushing ownership of the stock up by 1 fund in 2016. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in Novartis AG (ADR) (NYSE:NVS), worth close to $478.9 million. Sitting at the No. 2 spot is Jim Simons’ Renaissance Technologies, which holds a $198.6 million position. Remaining hedge funds and institutional investors with similar optimism comprise John Osterweis’ Osterweis Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.