Is Smith & Nephew plc (ADR) (NYSE:SNN) going to take off soon? Hedge funds are taking a bearish view. The number of long hedge fund bets decreased by 1 lately.
In the 21st century investor’s toolkit, there are tons of indicators investors can use to watch Mr. Market. A pair of the most innovative 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 top hedge fund managers can outperform the broader indices by a significant amount (see just how much).
Equally as beneficial, optimistic insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are plenty of incentives for an insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).
Consequently, let’s take a look at the latest action encompassing Smith & Nephew plc (ADR) (NYSE:SNN).
How have hedgies been trading Smith & Nephew plc (ADR) (NYSE:SNN)?
Heading into Q2, a total of 6 of the hedge funds we track held long positions 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 notable hedge fund managers who were upping their stakes substantially.
According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Smith & Nephew plc (ADR) (NYSE:SNN). Fisher Asset Management has a $60.2 million position in the stock, comprising 0.2% of its 13F portfolio. On Fisher Asset Management’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $5.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include David Dreman’s Dreman Value Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Because Smith & Nephew plc (ADR) (NYSE:SNN) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few money managers that elected to cut their full holdings last quarter. Interestingly, Ken Griffin’s Citadel Investment Group sold off the largest stake of the “upper crust” of funds we watch, comprising close to $0.5 million in stock.. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dumped its stock, about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds last quarter.
How are insiders trading Smith & Nephew plc (ADR) (NYSE:SNN)?
Insider buying is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time period, Smith & Nephew plc (ADR) (NYSE:SNN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Smith & Nephew plc (ADR) (NYSE:SNN). These stocks are Varian Medical Systems, Inc. (NYSE:VAR), Zimmer Holdings, Inc. (NYSE:ZMH), Edwards Lifesciences Corp (NYSE:EW), St. Jude Medical, Inc. (NYSE:STJ), and Boston Scientific Corporation (NYSE:BSX). All of these stocks are in the medical appliances & equipment industry and their market caps resemble SNN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Varian Medical Systems, Inc. (NYSE:VAR) | 20 | 0 | 10 |
| Zimmer Holdings, Inc. (NYSE:ZMH) | 31 | 0 | 8 |
| Edwards Lifesciences Corp (NYSE:EW) | 21 | 2 | 8 |
| St. Jude Medical, Inc. (NYSE:STJ) | 27 | 0 | 11 |
| Boston Scientific Corporation (NYSE:BSX) | 38 | 1 | 0 |
With the returns exhibited by Insider Monkey’s time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Smith & Nephew plc (ADR) (NYSE:SNN) is an important part of this process.
