A report from Financial Times mentioning a potential acquisition bid for St. Jude Medical, Inc. (NYSE:STJ) helped rocket the shares of the company up by nearly 15% in pre-market trading this morning before the rumors were shot down. According to the report, Abbott Laboratories (NYSE:ABT) was preparing to make a $125 billion bid for the medical device maker. However, Abbott Laboratories immediately denied any such action was imminent, negating the majority of St. Jude Medical, Inc. (NYSE:STJ)’s gains. Nonetheless, shares of St. Jude are still up by nearly 4%, as investors perhaps feel Abbott Laboratories is just playing coy so as not to drive the price of the stock up. Miles White, Chief Executive Officer of Abbott Laboratories did note that the company would be interested in potential acquisitions in the medical device sector.
The shares of St. Jude Medical, Inc. (NYSE:STJ) are now up by 4.76% year-to-date and are trading at $72.71 per share, as of the reporting period. The medical device maker reported better-than-expected second quarter financial results on July 22. St. Jude Medical, Inc. (NYSE:STJ) pulled in earnings per share of $1.03 over revenues of $1.41 billion. The market was expecting EPS of $1.00 along with revenues of $1.39 billion for the quarter. The shares of St. Jude Medical, Inc. have received a consensus rating of “Buy” from analysts covering the stock, along with a price target of $79.67, representing an upside potential of 10% from its current share price. The smart money held a positive outlook for St. Jude Medical, Inc. (NYSE:STJ) during the second quarter, as 41 hedge funds held positions worth $787.35 million. The aggregate holdings grew by 24.80% during the quarter, while the number of hedge funds holding positions was up by four.
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Insider activity can help identify the sentiment held by the insiders of any given company. Looking at the insider activity for St. Jude Medical, Inc. (NYSE:STJ), there were 19 insider sales made so far in 2015. Daniel Starks, CEO of St. Jude Medical, Inc., has sold 200,000 shares of the company year-to-date.
What does the smart money think about St. Jude Medical, Inc. (NYSE:STJ)?
Among the hedge funds that we track, Ivory Capital, led by Curtis Macnguyen, was the largest shareholder of St. Jude Medical, Inc. (NYSE:STJ), holding 1.61 million shares worth $117.31 million. David Stemerman of Conatus Capital Management was another major stakeholder of the company, with 1.38 million shares valued at $101.15 million. Ariel Investments and Balyasny Asset Management were among the other hedge funds owning a significant number of shares of the medical device manufacturer, 1.28 million and 646,326, respectively.
North Tide Capital, led by Conan Laughlin, initiated a new position in St. Jude Medical, Inc. during the second quarter, owning 500,000 shares with a market value of $36.54 million at the end of the quarter. Aaron Cowen of Suvretta Capital Management had 476,700 shares of the medical device maker in his portfolio. Gotham Asset Management and Millennium Management were among the hedge funds trimming their stakes in St. Jude Medical, Inc. (NYSE:STJ), ending the quarter with 72,464 and 172,002 shares respectively.
With positive hedge fund sentiment and strong second quarter financial results, St. Jude Medical, Inc. (NYSE:STJ) holds better prospects for the future, with or without a sale. We would recommend a long position in the company.
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