To the average investor, there are a multitude of metrics market participants can use to track Mr. Market. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can outclass the market by a solid margin (see just how much).
Equally as integral, optimistic insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are a variety of incentives for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the recent action surrounding Varian Medical Systems, Inc. (NYSE:VAR).
What have hedge funds been doing with Varian Medical Systems, Inc. (NYSE:VAR)?
At the end of the first quarter, a total of 20 of the hedge funds we track were long in this stock, a change of 18% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, David Blood and Al Gore’s Generation Investment Management had the largest position in Varian Medical Systems, Inc. (NYSE:VAR), worth close to $265.1 million, comprising 5.4% of its total 13F portfolio. Sitting at the No. 2 spot is Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, which held a $71.5 million position; 2.2% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Anthony Bozza’s Lakewood Capital Management and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Lakewood Capital Management, managed by Anthony Bozza, assembled the largest position in Varian Medical Systems, Inc. (NYSE:VAR). Lakewood Capital Management had 13.5 million invested in the company at the end of the quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC also made a $6.5 million investment in the stock during the quarter. The following funds were also among the new VAR investors: Matthew Tewksbury’s Stevens Capital Management, David Harding’s Winton Capital Management, and Ray Dalio’s Bridgewater Associates.
Insider trading activity in Varian Medical Systems, Inc. (NYSE:VAR)
Insider buying is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time period, Varian Medical Systems, Inc. (NYSE:VAR) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Varian Medical Systems, Inc. (NYSE:VAR). These stocks are Boston Scientific Corporation (NYSE:BSX), Smith & Nephew plc (ADR) (NYSE:SNN), Hologic, Inc. (NASDAQ:HOLX), Edwards Lifesciences Corp (NYSE:EW), and ResMed Inc. (NYSE:RMD). This group of stocks belong to the medical appliances & equipment industry and their market caps are closest to VAR’s market cap.
