Do Hedge Funds and Insiders Love Colgate-Palmolive Company (CL)?

Colgate-Palmolive Company (NYSE:CL) has experienced a decrease in hedge fund interest of late.

In the eyes of most stock holders, hedge funds are viewed as worthless, old investment tools of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the crème de la crème of this club, close to 450 funds. It is estimated that this group controls most of the hedge fund industry’s total capital, and by tracking their top equity investments, we have revealed a few 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 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as key, positive insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are plenty of reasons for an executive to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).

Consequently, let’s take a gander at the key action surrounding Colgate-Palmolive Company (NYSE:CL).

What does the smart money think about Colgate-Palmolive Company (NYSE:CL)?

In preparation for this quarter, a total of 29 of the hedge funds we track were long in this stock, a change of -6% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Jim Simons’s Renaissance Technologies had the largest position in Colgate-Palmolive Company (NYSE:CL), worth close to $490.9 million, accounting for 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Lansdowne Partners, managed by Paul Ruddock and Steve Heinz, which held a $462.2 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Jean-Marie Eveillard’s First Eagle Investment Management, William von Mueffling’s Cantillon Capital Management and Bill Miller’s Legg Mason Capital Management.

Judging by the fact that Colgate-Palmolive Company (NYSE:CL) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies that decided to sell off their entire stakes last quarter. Intriguingly, David Blood and Al Gore’s Generation Investment Management dumped the largest stake of the 450+ funds we track, comprising an estimated $78.6 million in stock., and Ray Dalio of Bridgewater Associates was right behind this move, as the fund dropped about $11.1 million worth. These transactions are important to note, as total hedge fund interest fell by 2 funds last quarter.

What do corporate executives and insiders think about Colgate-Palmolive Company (NYSE:CL)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Colgate-Palmolive Company (NYSE:CL) has experienced zero unique insiders buying, and 24 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Colgate-Palmolive Company (NYSE:CL). These stocks are Energizer Holdings, Inc. (NYSE:ENR), Avon Products, Inc. (NYSE:AVP), The Procter & Gamble Company (NYSE:PG), Estee Lauder Companies Inc (NYSE:EL), and Kimberly Clark Corp (NYSE:KMB). This group of stocks are the members of the personal products industry and their market caps resemble CL’s market cap.

With the returns demonstrated by Insider Monkey’s strategies, everyday investors should always watch hedge fund and insider trading activity, and Colgate-Palmolive Company (NYSE:CL) is an important part of this process.

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