Laboratory Corp. of America Holdings (LH): Hedge Funds Are Bearish and Insiders Are Undecided, What Should You Do?

At the moment, there are tons of methods market participants can use to watch the equity markets. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can outclass the S&P 500 by a significant amount (see just how much).

Just as crucial, positive insider trading sentiment is another way to look at the investments you’re interested in. Just as you’d expect, there are lots of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this tactic if shareholders understand where to look (learn more here).

Thus, let’s examine the latest info about Laboratory Corp. of America Holdings (NYSE:LH).

How have hedgies been trading Laboratory Corp. of America Holdings (NYSE:LH)?

Heading into Q3, a total of 20 of the hedge funds we track held long positions in this stock, a change of -20% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully.

When using filings from the hedgies we track, Harris Associates, managed by Natixis Global Asset Management, holds the biggest position in Laboratory Corp. of America Holdings (NYSE:LH). Harris Associates has a $529.3 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Richard S. Pzena of Pzena Investment Management, with a $227.1 million position; 1.5% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include John Shapiro’s Chieftain Capital, David Blood and Al Gore’s Generation Investment Management and Wallace Weitz’s Wallace R. Weitz & Co..

Due to the fact Laboratory Corp. of America Holdings (NYSE:LH) has faced bearish sentiment from the top-tier hedge fund industry, it’s safe to say that there were a few hedgies that slashed their entire stakes at the end of the second quarter. It’s worth mentioning that Michael A. Price and Amos Meron’s Empyrean Capital Partners sold off the biggest investment of all the hedgies we watch, totaling about $67.7 million in stock, and Stephen DuBois of Camber Capital Management was right behind this move, as the fund said goodbye to about $18 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds at the end of the second quarter.

What do corporate executives and insiders think about Laboratory Corp. of America Holdings (NYSE:LH)?

Insider buying is best served when the company in question has experienced transactions within the past half-year. Over the latest 180-day time period, Laboratory Corp. of America Holdings (NYSE:LH) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Laboratory Corp. of America Holdings (NYSE:LH). These stocks are Covance Inc. (NYSE:CVD), Agilent Technologies Inc. (NYSE:A), Life Technologies Corp. (NASDAQ:LIFE), Mettler-Toledo International Inc. (NYSE:MTD), and Quest Diagnostics Inc (NYSE:DGX). This group of stocks are in the medical laboratories & research industry and their market caps match LH’s market cap.

Using the returns shown by the previously mentioned research, average investors must always watch hedge fund and insider trading sentiment, and Laboratory Corp. of America Holdings (NYSE:LH) is an important part of this process.

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