Is WellPoint, Inc. (NYSE:WLP) a bargain? The smart money is selling. The number of long hedge fund bets decreased by 1 lately.
In today’s marketplace, there are plenty of metrics investors can use to watch the equity markets. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can beat the S&P 500 by a significant amount (see just how much).
Equally as key, positive insider trading activity is a second way to break down the marketplace. As the old adage goes: there are lots of stimuli for an executive to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Keeping this in mind, let’s take a look at the key action regarding WellPoint, Inc. (NYSE:WLP).
How have hedgies been trading WellPoint, Inc. (NYSE:WLP)?
At the end of the first quarter, a total of 44 of the hedge funds we track held long positions in this stock, a change of -2% from the previous quarter.
Judging by the fact that WellPoint, Inc. (NYSE:WLP) has experienced declining sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of funds who sold off their positions entirely heading into Q2. Intriguingly, Alan Fournier’s Pennant Capital Management dumped the biggest stake of the 450+ funds we track, totaling an estimated $194.3 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund dumped about $137.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q2.
How are insiders trading WellPoint, Inc. (NYSE:WLP)?
Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, WellPoint, Inc. (NYSE:WLP) has seen 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 WellPoint, Inc. (NYSE:WLP). These stocks are UnitedHealth Group Inc. (NYSE:UNH), Express Scripts Holding Company (NASDAQ:ESRX), Humana Inc (NYSE:HUM), Aetna Inc. (NYSE:AET), and CIGNA Corporation (NYSE:CI). This group of stocks are in the health care plans industry and their market caps are similar to WLP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| UnitedHealth Group Inc. (NYSE:UNH) | 55 | 1 | 9 |
| Express Scripts Holding Company (NASDAQ:ESRX) | 68 | 1 | 6 |
| Humana Inc (NYSE:HUM) | 36 | 0 | 6 |
| Aetna Inc. (NYSE:AET) | 54 | 1 | 7 |
| CIGNA Corporation (NYSE:CI) | 42 | 1 | 6 |
With the results exhibited by the aforementioned strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and WellPoint, Inc. (NYSE:WLP) shareholders fit into this picture quite nicely.
