Should You Avoid Insulet Corporation (PODD)?

Insulet Corporation (NASDAQ:PODD) investors should pay attention to a decrease in support from the world’s most elite money managers recently.

In today’s marketplace, there are tons of gauges market participants can use to track publicly traded companies. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outclass the broader indices by a healthy amount (see just how much).

Just as beneficial, bullish insider trading activity is another way to parse down the financial markets. Obviously, there are lots of incentives for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).

Consequently, we’re going to take a look at the recent action encompassing Insulet Corporation (NASDAQ:PODD).

How are hedge funds trading Insulet Corporation (NASDAQ:PODD)?

Heading into 2013, a total of 8 of the hedge funds we track were bullish in this stock, a change of -11% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Cupps Capital Management, managed by Drew Cupps, holds the largest position in Insulet Corporation (NASDAQ:PODD). Cupps Capital Management has a $9.3 million position in the stock, comprising 1% of its 13F portfolio. Coming in second is Brian Ashford-Russell and Tim Woolley of Polar Capital, with a $6.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Nathan Fischel’s DAFNA Capital Management and D. E. Shaw’s D E Shaw.

Since Insulet Corporation (NASDAQ:PODD) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers that decided to sell off their positions entirely at the end of the year. It’s worth mentioning that Samuel Isaly’s OrbiMed Advisors cut the biggest position of the 450+ funds we watch, comprising close to $5 million in stock. These transactions are important to note, as total hedge fund interest fell by 1 funds at the end of the year.

How are insiders trading Insulet Corporation (NASDAQ:PODD)?

Insider buying is at its handiest when the company in question has seen transactions within the past half-year. Over the latest half-year time period, Insulet Corporation (NASDAQ:PODD) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Insulet Corporation (NASDAQ:PODD). These stocks are Hill-Rom Holdings, Inc. (NYSE:HRC), Endologix, Inc. (NASDAQ:ELGX), Integra Lifesciences Holdings Corp (NASDAQ:IART), DexCom, Inc. (NASDAQ:DXCM), and HeartWare International Inc (NASDAQ:HTWR). All of these stocks are in the medical instruments & supplies industry and their market caps are similar to PODD’s market cap.