Express Scripts Holding Company (ESRX): Are Hedge Funds Right About This Stock?

Express Scripts Holding Company (NASDAQ:ESRX) is one of the most popular stocks among hedge funds but its investors should be aware of a decrease in support from the world’s most elite money managers of late. ESRX was in 69 hedge funds’ portfolio at the end of September. There were 72 hedge funds in our database with Express Scripts Holding Company (NASDAQ:ESRX) positions at the end of the previous quarter.

Express Scripts Holding Company (NASDAQ:ESRX)

According to hedge fund analytics website Insider Monkey General Motors was the most popular stock among hedge funds at the end of the third quarter (see the 10 most popular stocks among hedge funds). Express Scripts was the 37th most popular stock. Let’s take a look at the recent hedge fund action in the stock.

What does the smart money think about Express Scripts Holding Company (NASDAQ:ESRX)?

At the end of the third quarter, a total of 69 of the hedge funds we track held long positions in this stock, a change of -4% from a quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Jeffrey Tannenbaum’s Fir Tree had the biggest position in Express Scripts Holding Company (NASDAQ:ESRX), worth close to $390 million, accounting for 5.3% of its total 13F portfolio. The second largest stake is held by FPR Partners, managed by Bob Peck and Andy Raab, which held a $279 million position; 10.8% of its 13F portfolio is allocated to the company. Some other hedge fund managers with similar bullishness include John Shapiro’s Chieftain Capital, Lee Ainslie’s Maverick Capital and Michael Lowenstein’s Kensico Capital.

Seeing as Express Scripts Holding Company (NASDAQ:ESRX) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers who sold off their entire stakes heading into Q4. Interestingly, Bain Capital’s Brookside Capital dumped the largest stake of all the hedgies we watch, comprising an estimated $148.8 million in stock. Michael Karsch’s fund, Karsch Capital Management, also sold off its stock, about $67.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into the fourth quarter.

What do corporate executives and insiders think about Express Scripts Holding Company (NASDAQ:ESRX)?

Over the last six-month time frame, Express Scripts Holding Company (NASDAQ:ESRX) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here). This isn’t a bullish sign but it isn’t negative either.

Let’s check out hedge fund and insider activity in other stocks similar to Express Scripts Holding Company (NASDAQ:ESRX). These stocks are Humana Inc (NYSE:HUM), Aetna Inc. (NYSE:AET), CIGNA Corporation (NYSE:CI), WellPoint, Inc. (NYSE:WLP), and UnitedHealth Group Inc. (NYSE:UNH). This group of stocks are the members of the health care plans industry and their market caps resemble ESRX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Humana Inc (NYSE:HUM) 32 1 10
Aetna Inc. (NYSE:AET) 55 0 3
CIGNA Corporation (NYSE:CI) 44 0 9
WellPoint, Inc. (NYSE:WLP) 51 0 11
UnitedHealth Group Inc. (NYSE:UNH) 46 1 3

As you can see, Express Scripts is more popular than all of these healthcare stocks. Overall, we can say that hedge funds are bullish about the stock whereas insiders aren’t.



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