Baker Hughes Incorporated (NYSE:BHI) investors should pay attention to a decrease in hedge fund interest lately.
To most shareholders, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are greater than 8000 funds in operation today, we at Insider Monkey hone in on the aristocrats of this club, close to 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by tracking their top picks, we have formulated a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, positive insider trading sentiment is a second way to parse down the stock market universe. There are a variety of reasons for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Now, let’s take a peek at the key action encompassing Baker Hughes Incorporated (NYSE:BHI).
What have hedge funds been doing with Baker Hughes Incorporated (NYSE:BHI)?
At the end of the fourth quarter, a total of 29 of the hedge funds we track held long positions in this stock, a change of -3% from the third quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Richard S. Pzena’s Pzena Investment Management had the most valuable position in Baker Hughes Incorporated (NYSE:BHI), worth close to $307 million billion, comprising 2.5% of its total 13F portfolio. On Pzena Investment Management’s heels is Greenhaven Associates, managed by Edgar Wachenheim, which held a $287 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Charles de Vaulx’s International Value Advisers, Kerr Neilson’s Platinum Asset Management and D. E. Shaw’s D E Shaw.
Because Baker Hughes Incorporated (NYSE:BHI) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds who were dropping their entire stakes at the end of the year. It’s worth mentioning that Jason Capello’s Merchants’ Gate Capital sold off the biggest position of all the hedgies we monitor, totaling an estimated $110 million in stock.. Robert Rodriguez and Steven Romick’s fund, First Pacific Advisors LLC, also cut its stock, about $41 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds at the end of the year.
What do corporate executives and insiders think about Baker Hughes Incorporated (NYSE:BHI)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the last half-year time period, Baker Hughes Incorporated (NYSE:BHI) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned strategies, retail investors must always monitor hedge fund and insider trading activity, and Baker Hughes Incorporated (NYSE:BHI) applies perfectly to this mantra.
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