Deutsche Bank AG (USA) (DB): Have You Seen What This Metric Says?

Deutsche Bank AG (USA) (NYSE:DB) was in 11 hedge funds’ portfolio at the end of December. DB has seen a decrease in support from the world’s most elite money managers in recent months. There were 13 hedge funds in our database with DB holdings at the end of the previous quarter.

If you’d ask most stock holders, hedge funds are viewed as worthless, old financial tools of years past. While there are over 8000 funds with their doors open at present, we hone in on the crème de la crème of this group, close to 450 funds. It is estimated that this group controls most of all hedge funds’ total capital, and by monitoring their highest performing picks, we have spotted a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as integral, optimistic insider trading sentiment is a second way to break down the financial markets. Obviously, there are a variety of stimuli for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this strategy if you understand what to do (learn more here).

Now, we’re going to take a peek at the key action surrounding Deutsche Bank AG (USA) (NYSE:DB).

How have hedgies been trading Deutsche Bank AG (USA) (NYSE:DB)?

At the end of the fourth quarter, a total of 11 of the hedge funds we track held long positions in this stock, a change of -15% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.

Of the funds we track, Crispin Odey’s Odey Asset Management Group had the biggest position in Deutsche Bank AG (USA) (NYSE:DB), worth close to $18.4 million, comprising 1.1% of its total 13F portfolio. Sitting at the No. 2 spot is ZWEIG DIMENNA PARTNERS, managed by Joe DiMenna, which held a $14.2 million position; 0.6% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Jim Chanos’s Kynikos, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Since Deutsche Bank AG (USA) (NYSE:DB) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies that decided to sell off their entire stakes heading into 2013. At the top of the heap, Rob Citrone’s Discovery Capital Management cut the biggest position of all the hedgies we watch, valued at close to $13.9 million in stock.. John Fichthorn’s fund, Dialectic Capital Management, also said goodbye to its call options., about $4.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 2 funds heading into 2013.

Insider trading activity in Deutsche Bank AG (USA) (NYSE:DB)

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time frame, Deutsche Bank AG (USA) (NYSE:DB) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Deutsche Bank AG (USA) (NYSE:DB). These stocks are Banco Bradesco SA (ADR) (NYSE:BBD), Sumitomo Mitsui Financial Grp, Inc. (ADR) (NYSE:SMFG), ICICI Bank Limited (ADR) (NYSE:IBN), Mizuho Financial Group Inc. (ADR) (NYSE:MFG), and Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA). This group of stocks are the members of the foreign regional banks industry and their market caps are similar to DB’s market cap.

With the returns exhibited by the aforementioned strategies, retail investors must always monitor hedge fund and insider trading activity, and Deutsche Bank AG (USA) (NYSE:DB) applies perfectly to this mantra.

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