Humana Inc (NYSE:HUM) was in 36 hedge funds’ portfolio at the end of the first quarter of 2013. HUM investors should be aware of a decrease in hedge fund interest in recent months. There were 43 hedge funds in our database with HUM holdings at the end of the previous quarter.
To most stock holders, hedge funds are perceived as worthless, outdated investment tools of the past. While there are more than 8000 funds trading today, we at Insider Monkey look at the aristocrats of this club, around 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total asset base, and by tracking their highest performing investments, we have figured out a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, positive insider trading activity is a second way to parse down the financial markets. There are a number of stimuli for an executive to downsize shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).
Keeping this in mind, let’s take a gander at the latest action encompassing Humana Inc (NYSE:HUM).
How have hedgies been trading Humana Inc (NYSE:HUM)?
In preparation for this quarter, a total of 36 of the hedge funds we track were bullish in this stock, a change of -16% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Orbis Investment Management, managed by William B. Gray, holds the biggest position in Humana Inc (NYSE:HUM). Orbis Investment Management has a $428.6 million position in the stock, comprising 3.7% of its 13F portfolio. Sitting at the No. 2 spot is Glenview Capital, managed by Larry Robbins, which held a $274.4 million position; the fund has 2.9% of its 13F portfolio invested in the stock. Remaining peers that are bullish include D. E. Shaw’s D E Shaw, and Ken Griffin’s Citadel Investment Group.
Because Humana Inc (NYSE:HUM) has witnessed falling interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of money managers who sold off their full holdings in Q1. It’s worth mentioning that Andreas Halvorsen’s Viking Global dumped the biggest position of all the hedgies we monitor, totaling an estimated $242.3 million in stock.. Paul Reeder and Edward Shapiro’s fund, PAR Capital Management, also dumped its stock, about $110.4 million worth. These moves are important to note, as total hedge fund interest fell by 7 funds in Q1.
How are insiders trading Humana Inc (NYSE:HUM)?
Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time frame, Humana Inc (NYSE:HUM) has experienced zero unique insiders buying, and 6 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 Humana Inc (NYSE:HUM). These stocks are Express Scripts Holding Company (NASDAQ:ESRX), WellPoint, Inc. (NYSE:WLP), Coventry Health Care, Inc. (NYSE:CVH), CIGNA Corporation (NYSE:CI), and Aetna Inc. (NYSE:AET). All of these stocks are in the health care plans industry and their market caps match HUM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Express Scripts Holding Company (NASDAQ:ESRX) | 68 | 1 | 6 |
| WellPoint, Inc. (NYSE:WLP) | 44 | 0 | 8 |
| Coventry Health Care, Inc. (NYSE:CVH) | 32 | 0 | 10 |
| CIGNA Corporation (NYSE:CI) | 42 | 1 | 6 |
| Aetna Inc. (NYSE:AET) | 54 | 1 | 7 |
With the results shown by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Humana Inc (NYSE:HUM) shareholders fit into this picture quite nicely.
