EMC Corporation (EMC): Are Hedge Funds Right About This Stock?

EMC Corporation (NYSE:EMC) was in 59 hedge funds’ portfolio at the end of the first quarter. EMC investors should be aware of a decrease in support from the world’s most elite money managers of late. There were 63 hedge funds in our database with EMC holdings at the end of the previous quarter.

At the moment, there are a multitude of indicators market participants can use to watch Mr. Market. Some of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite investment managers can outclass the broader indices by a solid margin (see just how much).

Equally as key, positive insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are lots of reasons for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, we’re going to take a peek at the recent action regarding EMC Corporation (NYSE:EMC).

How have hedgies been trading EMC Corporation (NYSE:EMC)?

At the end of the first quarter, a total of 59 of the hedge funds we track were long in this stock, a change of -6% from the fourth quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, Lee Ainslie’s Maverick Capital had the most valuable position in EMC Corporation (NYSE:EMC), worth close to $259 million, comprising 3.4% of its total 13F portfolio. Sitting at the No. 2 spot is Cadian Capital, managed by Eric Bannasch, which held a $204.8 million position; the fund has 5.7% of its 13F portfolio invested in the stock. Some other peers that are bullish include Jim Simons’s Renaissance Technologies, Thomas Steyer’s Farallon Capital and Bain Capital’s Brookside Capital.

Due to the fact that EMC Corporation (NYSE:EMC) has witnessed declining sentiment from the smart money, it’s safe to say that there exists a select few fund managers who were dropping their positions entirely in Q1. Intriguingly, Andreas Halvorsen’s Viking Global said goodbye to the largest position of the “upper crust” of funds we key on, valued at an estimated $117 million in stock.. Ricky Sandler’s fund, Eminence Capital, also cut its stock, about $87.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 4 funds in Q1.

How are insiders trading EMC Corporation (NYSE:EMC)?

Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past half-year. Over the latest 180-day time period, EMC Corporation (NYSE:EMC) has experienced 1 unique insiders buying, 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 EMC Corporation (NYSE:EMC). These stocks are Brocade Communications Systems, Inc. (NASDAQ:BRCD), Western Digital Corp. (NASDAQ:WDC), NetApp Inc. (NASDAQ:NTAP), Seagate Technology PLC (NASDAQ:STX), and SanDisk Corporation (NASDAQ:SNDK). This group of stocks are in the data storage devices industry and their market caps resemble EMC’s market cap.