Is Rockwell Collins, Inc. (NYSE:COL) the right investment to pursue these days? The best stock pickers are turning less bullish. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
If you’d ask most market participants, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the leaders of this group, around 450 funds. It is estimated that this group oversees the majority of the smart money’s total asset base, and by keeping an eye on their best stock picks, we have figured out a few investment strategies that have historically beaten 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 started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, optimistic insider trading sentiment is a second way to parse down the marketplace. Just as you’d expect, there are a number of reasons for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the latest action regarding Rockwell Collins, Inc. (NYSE:COL).
How have hedgies been trading Rockwell Collins, Inc. (NYSE:COL)?
At the end of the fourth quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly.
According to our comprehensive database, ValueAct Capital, managed by Jeffrey Ubben, holds the biggest position in Rockwell Collins, Inc. (NYSE:COL). ValueAct Capital has a $613 million position in the stock, comprising 7.8% of its 13F portfolio. Sitting at the No. 2 spot is Thomas Steyer of Farallon Capital, with a $134 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Jean-Marie Eveillard’s First Eagle Investment Management, D. E. Shaw’s D E Shaw and Phill Gross and Robert Atchinson’s Adage Capital Management.
Seeing as Rockwell Collins, Inc. (NYSE:COL) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds that decided to sell off their entire stakes in Q4. At the top of the heap, Barry Rosenstein’s JANA Partners dumped the biggest stake of all the hedgies we track, worth an estimated $28 million in stock.. Daniel Arbess’s fund, Xerion, also sold off its stock, about $3 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Rockwell Collins, Inc. (NYSE:COL)?
Insider buying is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time period, Rockwell Collins, Inc. (NYSE:COL) has seen zero unique insiders buying, and 11 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey’s time-tested strategies, retail investors must always pay attention to hedge fund and insider trading activity, and Rockwell Collins, Inc. (NYSE:COL) is an important part of this process.
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