Zimmer Holdings, Inc. (NYSE:ZMH): Insiders Are Dumping, Should You?

Zimmer Holdings, Inc. (NYSE:ZMH) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.


At the moment, there are plenty of metrics investors can use to monitor stocks. Some of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace their index-focused peers by a very impressive margin (see just how much).

Equally as important, positive insider trading activity is another way to parse down the world of equities. As the old adage goes: there are lots of reasons for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if investors understand what to do (learn more here).

Now, let’s take a look at the latest action regarding Zimmer Holdings, Inc. (NYSE:ZMH).

What have hedge funds been doing with Zimmer Holdings, Inc. (NYSE:ZMH)?

At year’s end, a total of 30 of the hedge funds we track were long in this stock, a change of -3% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.

When looking at the hedgies we track, John W. Rogers’s Ariel Investments had the biggest position in Zimmer Holdings, Inc. (NYSE:ZMH), worth close to $86 million billion, comprising 1.8% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $67 million position; 0.5% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Samuel Isaly’s OrbiMed Advisors, Mario Gabelli’s GAMCO Investors and Jacob Gottlieb’s Visium Asset Management.

Seeing as Zimmer Holdings, Inc. (NYSE:ZMH) has experienced falling interest from the aggregate hedge fund industry, we can see that there was a specific group of money managers that decided to sell off their full holdings last quarter. Intriguingly, Richard Schimel’s Diamondback Capital sold off the largest position of the “upper crust” of funds we track, valued at about $20 million in stock.. Donald Chiboucis’s fund, Columbus Circle Investors, also dumped its stock, about $7 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds last quarter.

How are insiders trading Zimmer Holdings, Inc. (NYSE:ZMH)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Zimmer Holdings, Inc. (NYSE:ZMH) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

With the results shown by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Zimmer Holdings, Inc. (NYSE:ZMH) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.