Hewlett-Packard Company (NYSE:HPQ) is a battleground stock for many investors, but one group is giving it its full support.
In the eyes of many of your peers, hedge funds are viewed as useless, outdated financial tools of a forgotten age. Although there are over 8,000 hedge funds trading currently, this site looks at the elite of this club, around 525 funds. Analysts calculate that this group controls most of the smart money’s total capital, and by watching their best stock picks, we’ve discovered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as useful, positive insider trading sentiment is another way to analyze the investments you’re interested in. There are plenty of motivations for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).
Thus, it’s important to examine the recent info about Hewlett-Packard Company (NYSE:HPQ).
Hedge fund activity in Hewlett-Packard Company (NYSE:HPQ)
At Q2’s end, a total of 53 of the hedge funds we track were long in this stock, a change of 13% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably.
Out of the hedge funds we follow, Relational Investors, managed by Ralph V. Whitworth, holds the largest position in Hewlett-Packard Company (NYSE:HPQ). Relational Investors has a $856.5 million position in the stock, comprising 16.1% of its 13F portfolio. The second largest stake is held by Pzena Investment Management, managed by Richard S. Pzena, which held a $816.5 million position; 5.4% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Donald Yacktman’s Yacktman Asset Management, David Cohen and Harold Levy’s Iridian Asset Management and D. E. Shaw’s D E Shaw.
As one would understandably expect, certain money managers have jumped into Hewlett-Packard Company (NYSE:HPQ) headfirst. Relational Investors, managed by Ralph V. Whitworth, initiated the biggest position in Hewlett-Packard Company (NYSE:HPQ). Relational Investors had 856.5 million invested in the company at the end of the quarter. Richard S. Pzena’s Pzena Investment Management also made a $816.5 million investment in the stock during the quarter. The other funds with brand new HPQ positions are Donald Yacktman’s Yacktman Asset Management, David Cohen and Harold Levy’s Iridian Asset Management, and D. E. Shaw’s D E Shaw.
What have insiders been doing with Hewlett-Packard Company (NYSE:HPQ)?
Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time period, Hewlett-Packard Company (NYSE:HPQ) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Hewlett-Packard Company (NYSE:HPQ). These stocks are Silicon Graphics International Corp (NASDAQ:SGI), Cray Inc. (NASDAQ:CRAY), International Business Machines Corp. (NYSE:IBM), and Teradata Corporation (NYSE:TDC). All of these stocks are in the diversified computer systems industry and their market caps are similar to HPQ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Silicon Graphics International Corp (NASDAQ:SGI) | 17 | 0 | 6 |
| Cray Inc. (NASDAQ:CRAY) | 13 | 0 | 12 |
| International Business Machines Corp. (NYSE:IBM) | 49 | 0 | 11 |
| Teradata Corporation (NYSE:TDC) | 25 | 0 | 4 |
Using the results explained by Insider Monkey’s studies, regular investors must always watch hedge fund and insider trading activity, and Hewlett-Packard Company (NYSE:HPQ) is an important part of this process.
