Is WellPoint, Inc. (NYSE:WLP) a good buy?
Now, according to many of your fellow readers, hedge funds are perceived as delayed, outdated investment tools of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open in present day, this site looks at the upper echelon of this group, close to 525 funds. It is widely held that this group oversees the majority of the hedge fund industry’s total capital, and by monitoring their highest performing investments, we’ve figured out a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, positive insider trading sentiment is another way to look at the world of equities. There are lots of stimuli for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).
Now that that’s out of the way, let’s analyze the newest info surrounding WellPoint, Inc. (NYSE:WLP).
What have hedge funds been doing with WellPoint, Inc. (NYSE:WLP)?
At the end of the second quarter, a total of 50 of the hedge funds we track were bullish in this stock, a change of 14% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially.
As industrywide interest increased, certain bigger names were leading the bulls’ herd. Orbis Investment Management, managed by William B. Gray, created the most outsized position in WellPoint, Inc. (NYSE:WLP). Orbis Investment Management had 638.4 million invested in the company at the end of the quarter. Matt McLennan’s First Eagle Investment Management also initiated a $513.3 million position during the quarter. The other funds with brand new WLP positions are Donald Yacktman’s Yacktman Asset Management, Paul ReederáandáEdward Shapiro’s PAR Capital Management, and Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC.
How have insiders been trading WellPoint, Inc. (NYSE:WLP)?
Insider buying made by high-level executives is at its handiest when the company in question has seen transactions within the past six months. Over the latest 180-day time period, WellPoint, Inc. (NYSE:WLP) has seen zero unique insiders purchasing, and 11 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 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 the members of 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) | 57 | 0 | 8 |
| Express Scripts Holding Company (NASDAQ:ESRX) | 72 | 1 | 8 |
| Humana Inc (NYSE:HUM) | 33 | 0 | 9 |
| Aetna Inc. (NYSE:AET) | 55 | 0 | 4 |
| CIGNA Corporation (NYSE:CI) | 44 | 1 | 8 |
Using the results explained by the previously mentioned analyses, regular investors must always watch hedge fund and insider trading activity, and WellPoint, Inc. (NYSE:WLP) is an important part of this process.
