Abbott Laboratories (NYSE:ABT)’s stock hasn’t had as good of a 2013 as some investors may want, but one indicator tells us now may be the time to buy.
Now, according to many of your fellow readers, hedge funds are viewed as delayed, outdated investment vehicles of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open currently, Insider Monkey focuses on the upper echelon of this club, around 525 funds. Analysts calculate that this group oversees the majority of the smart money’s total capital, and by tracking their highest performing picks, we’ve found a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as useful, positive insider trading sentiment is a second way to analyze the investments you’re interested in. There are plenty of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this strategy if investors know where to look (learn more here).
Thus, we’re going to discuss the recent info surrounding Abbott Laboratories (NYSE:ABT).
What does the smart money think about Abbott Laboratories (NYSE:ABT)?
At the end of the second quarter, a total of 37 of the hedge funds we track were bullish in this stock, a change of 19% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings significantly.
As aggregate interest spiked, certain bigger names have been driving this bullishness. Southeastern Asset Management, managed by Mason Hawkins, created the most outsized position in Abbott Laboratories (NYSE:ABT). Southeastern Asset Management had 502.9 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $152.6 million investment in the stock during the quarter. The other funds with brand new ABT positions are Richard S. Pzena’s Pzena Investment Management, Ric Dillon’s Diamond Hill Capital, and Phill Gross and Robert Atchinson’s Adage Capital Management.
What have insiders been doing with Abbott Laboratories (NYSE:ABT)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, Abbott Laboratories (NYSE:ABT) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Abbott Laboratories (NYSE:ABT). These stocks are St. Jude Medical, Inc. (NYSE:STJ), Zimmer Holdings, Inc. (NYSE:ZMH), Intuitive Surgical, Inc. (NASDAQ:ISRG), Stryker Corporation (NYSE:SYK), and Medtronic, Inc. (NYSE:MDT). All of these stocks are in the medical appliances & equipment industry and their market caps match ABT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| St. Jude Medical, Inc. (NYSE:STJ) | 23 | 0 | 10 |
| Zimmer Holdings, Inc. (NYSE:ZMH) | 31 | 0 | 7 |
| Intuitive Surgical, Inc. (NASDAQ:ISRG) | 31 | 0 | 2 |
| Stryker Corporation (NYSE:SYK) | 27 | 0 | 4 |
| Medtronic, Inc. (NYSE:MDT) | 38 | 1 | 5 |
Using the results shown by Insider Monkey’s research, average investors should always keep one eye on hedge fund and insider trading activity, and Abbott Laboratories (NYSE:ABT) is no exception.
