Church & Dwight Co., Inc. (CHD): Hedge Funds and Insiders Are Bullish, What Should You Do?

Church & Dwight Co., Inc. (NYSE:CHD) has experienced an increase in support from the world’s most elite money managers recently.

To most investors, hedge funds are viewed as slow, outdated investment tools of the past. While there are greater than 8000 funds trading today, we hone in on the leaders of this group, close to 450 funds. It is widely believed that this group controls the majority of the smart money’s total asset base, and by paying attention to their highest performing picks, we have formulated a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as important, positive insider trading activity is another way to parse down the world of equities. There are lots of motivations for an insider to cut shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the useful potential of this tactic if investors know where to look (learn more here).

With all of this in mind, let’s take a glance at the latest action surrounding Church & Dwight Co., Inc. (NYSE:CHD).

What have hedge funds been doing with Church & Dwight Co., Inc. (NYSE:CHD)?

Heading into Q2, a total of 18 of the hedge funds we track were long in this stock, a change of 38% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.

When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Church & Dwight Co., Inc. (NYSE:CHD). Citadel Investment Group has a $39.4 million position in the stock, comprising 0.1% of its 13F portfolio. On Citadel Investment Group’s heels is Mario Gabelli of GAMCO Investors, with a $27.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Jim Simons’s Renaissance Technologies.

As aggregate interest increased, key money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, created the largest position in Church & Dwight Co., Inc. (NYSE:CHD). Citadel Investment Group had 39.4 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $4.5 million investment in the stock during the quarter. The other funds with brand new CHD positions are Anand Parekh’s Alyeska Investment Group, Israel Englander’s Millennium Management, and Steven Cohen’s SAC Capital Advisors.

What do corporate executives and insiders think about Church & Dwight Co., Inc. (NYSE:CHD)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time period, Church & Dwight Co., Inc. (NYSE:CHD) has experienced 1 unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Church & Dwight Co., Inc. (NYSE:CHD). These stocks are Ocean Bio-Chem, Inc. (NASDAQ:OBCI), Zep, Inc. (NYSE:ZEP), Stepan Company (NYSE:SCL), and Ecolab Inc. (NYSE:ECL). This group of stocks are the members of the cleaning products industry and their market caps are similar to CHD’s market cap.

With the results exhibited by our strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Church & Dwight Co., Inc. (NYSE:CHD) applies perfectly to this mantra.

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