Is Smith & Nephew plc (ADR) (NYSE:SNN) undervalued? Money managers are getting more bullish. The number of bullish hedge fund positions rose by 1 lately.
In today’s marketplace, there are a multitude of gauges investors can use to monitor their holdings. A duo of the most under-the-radar 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 best fund managers can beat the broader indices by a solid margin (see just how much).
Just as important, optimistic insider trading activity is a second way to break down the stock market universe. Obviously, there are a variety of incentives for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the recent action regarding Smith & Nephew plc (ADR) (NYSE:SNN).
What does the smart money think about Smith & Nephew plc (ADR) (NYSE:SNN)?
In preparation for this year, a total of 7 of the hedge funds we track were long in this stock, a change of 17% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Smith & Nephew plc (ADR) (NYSE:SNN). Fisher Asset Management has a $56.1 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Dreman Value Management, managed by David Dreman, which held a $4.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Consequently, specific money managers have jumped into Smith & Nephew plc (ADR) (NYSE:SNN) headfirst. Citadel Investment Group, managed by Ken Griffin, created the biggest position in Smith & Nephew plc (ADR) (NYSE:SNN). Citadel Investment Group had 0.5 million invested in the company at the end of the quarter.
What have insiders been doing with Smith & Nephew plc (ADR) (NYSE:SNN)?
Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, Smith & Nephew plc (ADR) (NYSE:SNN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at 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). This group of stocks belong to the medical appliances & equipment industry and their market caps are similar to SNN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Varian Medical Systems, Inc. (NYSE:VAR) | 16 | 0 | 13 |
| Zimmer Holdings, Inc. (NYSE:ZMH) | 30 | 0 | 7 |
| Edwards Lifesciences Corp (NYSE:EW) | 14 | 0 | 9 |
| St. Jude Medical, Inc. (NYSE:STJ) | 27 | 1 | 9 |
| Boston Scientific Corporation (NYSE:BSX) | 40 | 1 | 0 |
With the results exhibited by the aforementioned research, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Smith & Nephew plc (ADR) (NYSE:SNN) is an important part of this process.
