A Smart Eli Lilly & Co. (LLY) Investor Does What Now?

Eli Lilly & Co. (NYSE:LLY) was in 35 hedge funds’ portfolio at the end of March. LLY investors should be aware of a decrease in hedge fund interest recently. There were 36 hedge funds in our database with LLY positions at the end of the previous quarter.

In the financial world, there are a multitude of metrics shareholders can use to track stocks. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the market by a very impressive margin (see just how much).

Equally as important, positive insider trading sentiment is another way to break down the stock market universe. There are lots of stimuli for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this method if investors understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a gander at the recent action surrounding Eli Lilly & Co. (NYSE:LLY).

How have hedgies been trading Eli Lilly & Co. (NYSE:LLY)?

At the end of the first quarter, a total of 35 of the hedge funds we track were long in this stock, a change of -3% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Eli Lilly & Co. (NYSE:LLY). Renaissance Technologies has a $599.5 million position in the stock, comprising 1.5% of its 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $204.8 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Cliff Asness’s AQR Capital Management, Stanley Druckenmiller’s Duquesne Capital and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.

Due to the fact that Eli Lilly & Co. (NYSE:LLY) has witnessed a declination in interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds that decided to sell off their full holdings at the end of the first quarter. Intriguingly, Stephen DuBois’s Camber Capital Management sold off the biggest stake of the “upper crust” of funds we watch, totaling close to $49 million in call options, and Stephen DuBois of Camber Capital Management was right behind this move, as the fund dropped about $24.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds at the end of the first quarter.

How are insiders trading Eli Lilly & Co. (NYSE:LLY)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, Eli Lilly & Co. (NYSE:LLY) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the returns exhibited by our tactics, everyday investors should always keep an eye on hedge fund and insider trading activity, and Eli Lilly & Co. (NYSE:LLY) applies perfectly to this mantra.

Click here to learn why you should track hedge funds