Do Hedge Funds and Insiders Love Tata Motors Limited (ADR) (TTM)?

If you were to ask many of your peers, hedge funds are seen as bloated, old investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey focuses on the crème de la crème of this group, around 525 funds. It is assumed that this group controls most of the hedge fund industry’s total assets, and by tracking their highest performing equity investments, we’ve determined a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Equally as key, bullish insider trading sentiment is another way to look at the world of equities. Just as you’d expect, there are lots of reasons for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).

What’s more, let’s analyze the latest info for Tata Motors Limited (ADR) (NYSE:TTM).

Hedge fund activity in Tata Motors Limited (ADR) (NYSE:TTM)

At Q2’s end, a total of 23 of the hedge funds we track were bullish in this stock, a change of 5% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.

Out of the hedge funds we follow, Ken Fisher’s Fisher Asset Management had the most valuable position in Tata Motors Limited (ADR) (NYSE:TTM), worth close to $55.3 million, accounting for 0.1% of its total 13F portfolio. On Fisher Asset Management’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $18.7 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Cliff Asness’s AQR Capital Management, Murray Stahl’s Horizon Asset Management and Israel Englander’s Millennium Management.

As aggregate interest spiked, particular hedge funds were leading the bulls’ herd. Fisher Asset Management, managed by Ken Fisher, assembled the largest position in Tata Motors Limited (ADR) (NYSE:TTM). Fisher Asset Management had 55.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $18.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, Murray Stahl’s Horizon Asset Management, and Israel Englander’s Millennium Management.

How are insiders trading Tata Motors Limited (ADR) (NYSE:TTM)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the company in question has seen transactions within the past 180 days. Over the latest half-year time frame, Tata Motors Limited (ADR) (NYSE:TTM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Tata Motors Limited (ADR) (NYSE:TTM). These stocks are Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), Tesla Motors Inc (NASDAQ:TSLA), Nissan Motor Co., Ltd. (ADR) (PINK:NSANY), and General Motors Company (NYSE:GM). This group of stocks belong to the auto manufacturers – major industry and their market caps are similar to TTM’s market cap.

Using the returns demonstrated by our studies, average investors must always pay attention to hedge fund and insider trading sentiment, and Tata Motors Limited (ADR) (NYSE:TTM) is no exception.

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