Aetna Inc. (AET): Are Hedge Funds Right About This Stock?

Aetna Inc. (NYSE:AET) was in 54 hedge funds’ portfolio at the end of the first quarter of 2013. AET investors should be aware of an increase in activity from the world’s largest hedge funds recently. There were 47 hedge funds in our database with AET holdings at the end of the previous quarter.

To the average investor, there are tons of metrics market participants can use to track publicly traded companies. Some of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a healthy margin (see just how much).

Equally as important, positive insider trading activity is a second way to parse down the world of equities. Just as you’d expect, there are a number of motivations for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

Now, it’s important to take a peek at the latest action surrounding Aetna Inc. (NYSE:AET).

What does the smart money think about Aetna Inc. (NYSE:AET)?

At Q1’s end, a total of 54 of the hedge funds we track were long in this stock, a change of 15% from the previous quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes substantially.

Of the funds we track, Greenlight Capital, managed by David Einhorn, holds the most valuable position in Aetna Inc. (NYSE:AET). Greenlight Capital has a $332.8 million position in the stock, comprising 5.1% of its 13F portfolio. On Greenlight Capital’s heels is Paulson & Co, managed by John Paulson, which held a $332.3 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other peers that are bullish include Daniel S. Och’s OZ Management, Barry Rosenstein’s JANA Partners and William B. Gray’s Orbis Investment Management.

Now, specific money managers have jumped into Aetna Inc. (NYSE:AET) headfirst. Viking Global, managed by Andreas Halvorsen, created the most outsized position in Aetna Inc. (NYSE:AET). Viking Global had 65.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $52.1 million position during the quarter. The other funds with brand new AET positions are SAC Subsidiary’s CR Intrinsic Investors, Dmitry Balyasny’s Balyasny Asset Management, and Curtis Schenker and Craig Effron’s Scoggin.

Insider trading activity in Aetna Inc. (NYSE:AET)

Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time period, Aetna Inc. (NYSE:AET) has seen 1 unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Aetna Inc. (NYSE:AET). These stocks are Express Scripts Holding Company (NASDAQ:ESRX), Coventry Health Care, Inc. (NYSE:CVH), Humana Inc (NYSE:HUM), WellPoint, Inc. (NYSE:WLP), and CIGNA Corporation (NYSE:CI). This group of stocks belong to the health care plans industry and their market caps are similar to AET’s market cap.

With the results shown by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Aetna Inc. (NYSE:AET) shareholders fit into this picture quite nicely.

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