Hedge Funds Are Selling Berkshire Hathaway Inc. (BRK.B)

Is Berkshire Hathaway Inc. (NYSE:BRK-B) a worthy investment right now? Prominent investors are becoming less confident. The number of long hedge fund bets shrunk by 4 lately.

To most stock holders, hedge funds are perceived as worthless, old financial tools of the past. While there are over 8000 funds trading at present, we look at the crème de la crème of this group, about 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total asset base, and by monitoring their top equity investments, we have determined a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Equally as integral, optimistic insider trading activity is another way to parse down the stock market universe. Obviously, there are many reasons for an insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this method if piggybackers understand where to look (learn more here).

Keeping this in mind, let’s take a peek at the key action encompassing Berkshire Hathaway Inc. (NYSE:BRK-B).

What have hedge funds been doing with Berkshire Hathaway Inc. (NYSE:BRK.B)?

At Q1’s end, a total of 67 of the hedge funds we track were bullish in this stock, a change of -6% from the fourth quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, Michael Larson’s Bill & Melinda Gates Foundation Trust had the most valuable position in Berkshire Hathaway Inc. (NYSE:BRK.B), worth close to $8.4226 billion, accounting for 46.5% of its total 13F portfolio. Coming in second is Boykin Curry of Eagle Capital Management, with a $1.135 billion position; 6.8% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Tom Russo’s Gardner Russo & Gardner, D. E. Shaw’s D E Shaw and Jean-Marie Eveillard’s First Eagle Investment Management.

Since Berkshire Hathaway Inc. (NYSE:BRK.B) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of fund managers who sold off their full holdings at the end of the quarter. Intriguingly, Andreas Halvorsen’s Viking Global cut the biggest position of the 450+ funds we watch, valued at about $206.7 million in stock., and Jeffrey Tannenbaum of Fir Tree was right behind this move, as the fund dumped about $80.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 4 funds at the end of the quarter.

How have insiders been trading Berkshire Hathaway Inc. (NYSE:BRK.B)?

Insider buying is at its handiest when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time frame, Berkshire Hathaway Inc. (NYSE:BRK.B) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).