GlaxoSmithKline plc (ADR) (NYSE:GSK) was in 18 hedge funds’ portfolio at the end of March. GSK investors should be aware of a decrease in enthusiasm from smart money lately. There were 18 hedge funds in our database with GSK holdings at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are seen as unimportant, outdated financial tools of the past. While there are greater than 8000 funds trading today, we hone in on the crème de la crème of this group, about 450 funds. It is estimated that this group oversees most of all hedge funds’ total asset base, and by keeping an eye on their highest performing stock picks, we have formulated a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as beneficial, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are many stimuli for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this tactic if investors understand where to look (learn more here).
With all of this in mind, we’re going to take a glance at the latest action encompassing GlaxoSmithKline plc (ADR) (NYSE:GSK).
How have hedgies been trading GlaxoSmithKline plc (ADR) (NYSE:GSK)?
In preparation for this quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the largest position in GlaxoSmithKline plc (ADR) (NYSE:GSK), worth close to $519.1 million, comprising 1.4% of its total 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $330.5 million position; 2.7% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Bill Miller’s Legg Mason Capital Management, Jim Simons’s Renaissance Technologies and Warren Buffett’s Berkshire Hathaway.
Because GlaxoSmithKline plc (ADR) (NYSE:GSK) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedgies who were dropping their positions entirely at the end of the first quarter. It’s worth mentioning that Malcolm Fairbairn’s Ascend Capital dumped the biggest position of the “upper crust” of funds we watch, totaling close to $30.9 million in stock., and Sanford J. Colen of Apex Capital was right behind this move, as the fund said goodbye to about $11.7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in GlaxoSmithKline plc (ADR) (NYSE:GSK)
Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time frame, GlaxoSmithKline plc (ADR) (NYSE:GSK) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to GlaxoSmithKline plc (ADR) (NYSE:GSK). These stocks are AbbVie Inc (NYSE:ABBV), Bristol Myers Squibb Co. (NYSE:BMY), Novartis AG (ADR) (NYSE:NVS), Sanofi SA (ADR) (NYSE:SNY), and Merck & Co., Inc. (NYSE:MRK). All of these stocks are in the drug manufacturers – major industry and their market caps match GSK’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| AbbVie Inc (NYSE:ABBV) | 39 | 2 | 3 |
| Bristol Myers Squibb Co. (NYSE:BMY) | 33 | 0 | 13 |
| Novartis AG (ADR) (NYSE:NVS) | 24 | 0 | 0 |
| Sanofi SA (ADR) (NYSE:SNY) | 53 | 0 | 0 |
| Merck & Co., Inc. (NYSE:MRK) | 56 | 0 | 4 |
With the results demonstrated by the aforementioned strategies, retail investors should always watch hedge fund and insider trading activity, and GlaxoSmithKline plc (ADR) (NYSE:GSK) is no exception.
