In today’s marketplace, there are plenty of metrics market participants can use to analyze stocks. Some of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can trounce the S&P 500 by a superb amount (see just how much).
Equally as necessary, optimistic insider trading sentiment is another way to look at the marketplace. Just as you’d expect, there are lots of reasons for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).
What’s more, let’s study the recent info surrounding CareFusion Corporation (NYSE:CFN).
What does the smart money think about CareFusion Corporation (NYSE:CFN)?
Heading into Q3, a total of 34 of the hedge funds we track held long positions in this stock, a change of 26% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.
As aggregate interest spiked, certain money managers have been driving this bullishness. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, assembled the largest position in CareFusion Corporation (NYSE:CFN). First Pacific Advisors LLC had 186 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $96.3 million investment in the stock during the quarter. The other funds with brand new CFN positions are James Dinan’s York Capital Management, Ricky Sandler’s Eminence Capital, and Daniel S. Och’s OZ Management.
How have insiders been trading CareFusion Corporation (NYSE:CFN)?
Insider buying made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, CareFusion Corporation (NYSE:CFN) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to CareFusion Corporation (NYSE:CFN). These stocks are Teleflex Incorporated (NYSE:TFX), Mindray Medical International Ltd (ADR) (NYSE:MR), The Cooper Companies, Inc. (NYSE:COO), DENTSPLY International Inc. (NASDAQ:XRAY), and C.R. Bard, Inc. (NYSE:BCR). This group of stocks are in the medical instruments & supplies industry and their market caps are similar to CFN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Teleflex Incorporated (NYSE:TFX) | 15 | 0 | 1 |
| Mindray Medical International Ltd (ADR) (NYSE:MR) | 11 | 0 | 0 |
| The Cooper Companies, Inc. (NYSE:COO) | 27 | 0 | 13 |
| DENTSPLY International Inc. (NASDAQ:XRAY) | 10 | 0 | 4 |
| C.R. Bard, Inc. (NYSE:BCR) | 24 | 0 | 16 |
Using the returns explained by the previously mentioned studies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and CareFusion Corporation (NYSE:CFN) shareholders fit into this picture quite nicely.
