In the eyes of most investors, hedge funds are perceived as worthless, old financial tools of years past. While there are over 8000 funds with their doors open today, we at Insider Monkey hone in on the upper echelon of this club, close to 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total capital, and by monitoring their top stock picks, we have figured out a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed 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 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as integral, optimistic insider trading activity is another way to parse down the marketplace. There are many stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).
Consequently, let’s take a gander at the key action regarding TIM Participacoes SA (ADR) (NYSE:TSU).
Hedge fund activity in TIM Participacoes SA (ADR) (NYSE:TSU)
Heading into Q2, a total of 11 of the hedge funds we track were long in this stock, a change of 10% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly.
Of the funds we track, Israel Englander’s Millennium Management had the most valuable position in TIM Participacoes SA (ADR) (NYSE:TSU), worth close to $29.1 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Jericho Capital Asset Management, managed by Josh Resnick, which held a $28.4 million position; the fund has 3% of its 13F portfolio invested in the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group.
Consequently, specific money managers were breaking ground themselves. Meru Capital, managed by Guru Ramakrishnan, established the largest position in TIM Participacoes SA (ADR) (NYSE:TSU). Meru Capital had 5 million invested in the company at the end of the quarter. Mark Rachesky’s MHR Fund Management also made a $1.9 million investment in the stock during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.
What have insiders been doing with TIM Participacoes SA (ADR) (NYSE:TSU)?
Bullish insider trading is best served when the company in focus has seen transactions within the past six months. Over the latest six-month time period, TIM Participacoes SA (ADR) (NYSE:TSU) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to TIM Participacoes SA (ADR) (NYSE:TSU). These stocks are Mobile TeleSystems OJSC (ADR) (NYSE:MBT), Sprint Nextel Corporation (NYSE:S), VimpelCom Ltd (ADR) (NYSE:VIP), Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), and SK Telecom Co., Ltd. (ADR) (NYSE:SKM). This group of stocks belong to the wireless communications industry and their market caps resemble TSU’s market cap.
