BT Group plc (ADR) (BT): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

BT Group plc (ADR) (NYSE:BT) was in 9 hedge funds’ portfolio at the end of the first quarter of 2013. BT investors should be aware of an increase in support from the world’s most elite money managers lately. There were 8 hedge funds in our database with BT holdings at the end of the previous quarter.

To most investors, hedge funds are perceived as unimportant, old financial vehicles of the past. While there are greater than 8000 funds in operation at the moment, we hone in on the elite of this club, around 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by tracking their best stock picks, we have deciphered a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as integral, bullish insider trading sentiment is another way to break down the investments you’re interested in. There are plenty of reasons for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if you understand where to look (learn more here).

With all of this in mind, we’re going to take a gander at the latest action encompassing BT Group plc (ADR) (NYSE:BT).

What have hedge funds been doing with BT Group plc (ADR) (NYSE:BT)?

In preparation for this quarter, a total of 9 of the hedge funds we track were long in this stock, a change of 13% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in BT Group plc (ADR) (NYSE:BT). Renaissance Technologies has a $42.2 million position in the stock, comprising 0.1% of its 13F portfolio. On Renaissance Technologies’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $5.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Thomas Bailard’s Bailard Inc, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management.

Consequently, some big names were breaking ground themselves. D E Shaw, managed by D. E. Shaw, created the most valuable position in BT Group plc (ADR) (NYSE:BT). D E Shaw had 2.3 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.5 million position during the quarter.

What have insiders been doing with BT Group plc (ADR) (NYSE:BT)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past six months. Over the last half-year time frame, BT Group plc (ADR) (NYSE:BT) has experienced 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 BT Group plc (ADR) (NYSE:BT). These stocks are Telefonica S.A. (ADR) (NYSE:TEF), Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT), PT Telekomunikasi Indonesia (ADR) (NYSE:TLK), China Telecom Corporation Limited (ADR) (NYSE:CHA), and France Telecom SA (ADR) (NYSE:FTE). All of these stocks are in the telecom services – foreign industry and their market caps resemble BT’s market cap.

With the results exhibited by our time-tested strategies, retail investors should always watch hedge fund and insider trading sentiment, and BT Group plc (ADR) (NYSE:BT) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds