PharMerica Corporation (PMC): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

PharMerica Corporation (NYSE:PMC) shareholders have witnessed an increase in hedge fund interest in recent months.

In the financial world, there are plenty of indicators shareholders can use to monitor the equity markets. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outpace their index-focused peers by a very impressive margin (see just how much).

Equally as beneficial, positive insider trading sentiment is a second way to parse down the investments you’re interested in. As the old adage goes: there are a number of reasons for an executive to cut shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if “monkeys” understand where to look (learn more here).

With all of this in mind, it’s important to take a peek at the recent action regarding PharMerica Corporation (NYSE:PMC).

What does the smart money think about PharMerica Corporation (NYSE:PMC)?

At the end of the first quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of 8% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, D E Shaw, managed by D. E. Shaw, holds the most valuable position in PharMerica Corporation (NYSE:PMC). D E Shaw has a $10.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $6.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include David Dreman’s Dreman Value Management, Jim Simons’s Renaissance Technologies and Jacob Gottlieb’s Visium Asset Management.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Dreman Value Management, managed by David Dreman, created the largest position in PharMerica Corporation (NYSE:PMC). Dreman Value Management had 5.5 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Steven Cohen’s SAC Capital Advisors.

Insider trading activity in PharMerica Corporation (NYSE:PMC)

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, PharMerica Corporation (NYSE:PMC) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

With the returns exhibited by our studies, everyday investors should always watch hedge fund and insider trading sentiment, and PharMerica Corporation (NYSE:PMC) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds