Hedge Funds Are Betting On Northern Trust Corporation (NTRS)

Northern Trust Corporation (NASDAQ:NTRS) has seen an increase in hedge fund interest lately.

According to most traders, hedge funds are assumed to be underperforming, old financial vehicles of the past. While there are over 8000 funds in operation at the moment, we choose to focus on the moguls of this group, close to 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by monitoring their best investments, we have identified a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as important, optimistic insider trading sentiment is another way to break down the investments you’re interested in. There are a number of incentives for an executive to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).

Keeping this in mind, it’s important to take a look at the key action regarding Northern Trust Corporation (NASDAQ:NTRS).

What does the smart money think about Northern Trust Corporation (NASDAQ:NTRS)?

At Q1’s end, a total of 23 of the hedge funds we track held long positions in this stock, a change of 5% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, David Blood and Al Gore’s Generation Investment Management had the largest position in Northern Trust Corporation (NASDAQ:NTRS), worth close to $110.2 million, comprising 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which held a $97.6 million position; 0.6% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include John W. Rogers’s Ariel Investments, Donald Yacktman’s Yacktman Asset Management and Chuck Royce’s Royce & Associates.

As aggregate interest increased, key hedge funds have been driving this bullishness. Carlson Capital, managed by Clint Carlson, assembled the most outsized position in Northern Trust Corporation (NASDAQ:NTRS). Carlson Capital had 15 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $10.3 million position during the quarter. The other funds with new positions in the stock are Daniel Lascano’s Lomas Capital Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and D. E. Shaw’s D E Shaw.

Insider trading activity in Northern Trust Corporation (NASDAQ:NTRS)

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, Northern Trust Corporation (NASDAQ:NTRS) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Northern Trust Corporation (NASDAQ:NTRS). These stocks are Carlyle Group LP (NASDAQ:CG), Oaktree Capital Group LLC (NYSE:OAK), Principal Financial Group Inc (NYSE:PFG), Ameriprise Financial, Inc. (NYSE:AMP), and Invesco Ltd. (NYSE:IVZ). This group of stocks are the members of the asset management industry and their market caps are similar to NTRS’s market cap.

With the returns shown by Insider Monkey’s time-tested strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Northern Trust Corporation (NASDAQ:NTRS) applies perfectly to this mantra.

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