Delphi Automotive PLC (DLPH): Are Hedge Funds Right About This Stock?

Is Delphi Automotive PLC (NYSE:DLPH) the right investment to pursue these days? Money managers are betting on the stock. The number of bullish hedge fund positions went up by 7 recently.

At the moment, there are dozens of indicators market participants can use to watch publicly traded companies. Two of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can trounce their index-focused peers by a healthy margin (see just how much).

Equally as integral, positive insider trading sentiment is a second way to break down the marketplace. There are a variety of reasons for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

Now, let’s take a gander at the recent action surrounding Delphi Automotive PLC (NYSE:DLPH).

What have hedge funds been doing with Delphi Automotive PLC (NYSE:DLPH)?

At the end of the first quarter, a total of 49 of the hedge funds we track were long in this stock, a change of 17% from the previous quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Paul Singer’s Elliott Management had the biggest position in Delphi Automotive PLC (NYSE:DLPH), worth close to $972.4 million, comprising 20.3% of its total 13F portfolio. On Elliott Management’s heels is Paulson & Co, managed by John Paulson, which held a $386.3 million position; 2.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Edward A. Mule’s Silver Point Capital, Richard S. Pzena’s Pzena Investment Management and David Einhorn’s Greenlight Capital.

Now, key money managers have jumped into Delphi Automotive PLC (NYSE:DLPH) headfirst. Valinor Management LLC, managed by David Gallo, created the biggest position in Delphi Automotive PLC (NYSE:DLPH). Valinor Management LLC had 75.2 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also made a $66.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Alexander Mitchell’s Scopus Asset Management, and Tom Wagner and Ara Cohen’s Knighthead Capital.

What have insiders been doing with Delphi Automotive PLC (NYSE:DLPH)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Delphi Automotive PLC (NYSE:DLPH) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Delphi Automotive PLC (NYSE:DLPH). These stocks are LKQ Corporation (NASDAQ:LKQ), TRW Automotive Holdings Corp. (NYSE:TRW), Autoliv Inc. (NYSE:ALV), Johnson Controls, Inc. (NYSE:JCI), and BorgWarner Inc. (NYSE:BWA). This group of stocks belong to the auto parts industry and their market caps match DLPH’s market cap.

With the returns shown by the aforementioned tactics, retail investors should always monitor hedge fund and insider trading activity, and Delphi Automotive PLC (NYSE:DLPH) applies perfectly to this mantra.

Click here to learn why you should track hedge funds