Mettler-Toledo International Inc. (MTD), Life Technologies Corp. (LIFE): Hedge Funds Are Dumping Quest Diagnostics Inc (DGX)

Quest Diagnostics Inc (NYSE:DGX) has experienced a decrease in activity from the world’s largest hedge funds of late.

In the 21st century investor’s toolkit, there are dozens of indicators shareholders can use to track publicly traded companies. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outclass the market by a solid margin (see just how much).

Just as important, bullish insider trading sentiment is a second way to break down the world of equities. Obviously, there are lots of incentives for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).

Now, we’re going to take a glance at the key action regarding Quest Diagnostics Inc (NYSE:DGX).

How have hedgies been trading Quest Diagnostics Inc (NYSE:DGX)?

At the end of the fourth quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of -18% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings substantially.

According to our comprehensive database, Relational Investors, managed by Ralph V. Whitworth, holds the most valuable position in Quest Diagnostics Inc (NYSE:DGX). Relational Investors has a $301.3 million position in the stock, comprising 5.8% of its 13F portfolio. The second largest stake is held by Ric Dillon of Diamond Hill Capital, with a $112.4 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Ricky Sandler’s Eminence Capital, Bernard Horn’s Polaris Capital Management and Richard S. Pzena’s Pzena Investment Management.

Seeing as Quest Diagnostics Inc (NYSE:DGX) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few funds that elected to cut their positions entirely heading into 2013. Intriguingly, Donald Chiboucis’s Columbus Circle Investors sold off the biggest position of the 450+ funds we track, valued at about $14.7 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund dropped about $7.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds heading into 2013.

Insider trading activity in Quest Diagnostics Inc (NYSE:DGX)

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, Quest Diagnostics Inc (NYSE:DGX) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

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