Hedge Funds Are Crazy About Tyco International Ltd. (TYC)

Tyco International Ltd. (NYSE:TYC) was in 45 hedge funds’ portfolio at the end of the first quarter of 2013. TYC investors should be aware of an increase in support from the world’s most elite money managers of late. There were 44 hedge funds in our database with TYC positions at the end of the previous quarter.

In today’s marketplace, there are a multitude of metrics investors can use to track their holdings. A duo of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can beat the broader indices by a very impressive amount (see just how much).

Just as beneficial, bullish insider trading activity is a second way to parse down the investments you’re interested in. As the old adage goes: there are many incentives for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this tactic if investors understand where to look (learn more here).

With all of this in mind, we’re going to take a gander at the latest action encompassing Tyco International Ltd. (NYSE:TYC).

How are hedge funds trading Tyco International Ltd. (NYSE:TYC)?

Heading into Q2, a total of 45 of the hedge funds we track were bullish in this stock, a change of 2% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the biggest position in Tyco International Ltd. (NYSE:TYC). Iridian Asset Management has a $227.2 million position in the stock, comprising 3.3% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $174.4 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Daniel S. Och’s OZ Management and Jean-Marie Eveillard’s First Eagle Investment Management.

As one would reasonably expect, specific money managers were breaking ground themselves. Relational Investors, managed by Ralph V. Whitworth, initiated the most outsized position in Tyco International Ltd. (NYSE:TYC). Relational Investors had 101.6 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $35.1 million position during the quarter. The other funds with brand new TYC positions are Louis Bacon’s Moore Global Investments, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Steven Cohen’s SAC Capital Advisors.

Insider trading activity in Tyco International Ltd. (NYSE:TYC)

Insider buying is best served when the company in question has seen transactions within the past six months. Over the last half-year time frame, Tyco International Ltd. (NYSE:TYC) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Tyco International Ltd. (NYSE:TYC). These stocks are Checkpoint Systems, Inc. (NYSE:CKP), Ascent Capital Group Inc (NASDAQ:ASCMA), Brink’S Co (NYSE:BCO), The Geo Group, Inc. (NYSE:GEO), and ADT Corp (NYSE:ADT). This group of stocks are the members of the security & protection services industry and their market caps resemble TYC’s market cap.

With the results shown by Insider Monkey’s time-tested strategies, retail investors should always monitor hedge fund and insider trading activity, and Tyco International Ltd. (NYSE:TYC) applies perfectly to this mantra.

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