Hedge Funds Aren’t Crazy About Leucadia National Corp. (LUK) Anymore

Is Leucadia National Corp. (NYSE:LUK) going to take off soon? Investors who are in the know are getting less optimistic. The number of bullish hedge fund positions were trimmed by 1 lately.

In the 21st century investor’s toolkit, there are a multitude of indicators investors can use to analyze their holdings. A pair of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outperform the broader indices by a significant margin (see just how much).

Equally as beneficial, positive insider trading activity is a second way to break down the stock market universe. Obviously, there are lots of motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders know what to do (learn more here).

Consequently, we’re going to take a peek at the latest action encompassing Leucadia National Corp. (NYSE:LUK).

What does the smart money think about Leucadia National Corp. (NYSE:LUK)?

At the end of the first quarter, a total of 27 of the hedge funds we track were long in this stock, a change of -4% from the first quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings significantly.

When looking at the hedgies we track, Fairholme (FAIRX), managed by Bruce Berkowitz, holds the biggest position in Leucadia National Corp. (NYSE:LUK). Fairholme (FAIRX) has a $514.9 million position in the stock, comprising 6.6% of its 13F portfolio. Sitting at the No. 2 spot is Third Avenue Management, managed by Martin Whitman, which held a $162.3 million position; 3.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Charles Akre’s Akre Capital Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

Due to the fact that Leucadia National Corp. (NYSE:LUK) has faced bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that slashed their positions entirely at the end of the first quarter. At the top of the heap, Murray Stahl’s Horizon Asset Management cut the biggest investment of all the hedgies we key on, comprising close to $109.7 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund said goodbye to about $7.8 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds at the end of the first quarter.

What do corporate executives and insiders think about Leucadia National Corp. (NYSE:LUK)?

Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Leucadia National Corp. (NYSE:LUK) has experienced zero 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 Leucadia National Corp. (NYSE:LUK). These stocks are Pilgrim’s Pride Corporation (NASDAQ:PPC), Seaboard Corporation (NYSEAMEX:SEB), Smithfield Foods, Inc. (NYSE:SFD), Hormel Foods Corporation (NYSE:HRL), and Tyson Foods, Inc. (NYSE:TSN). This group of stocks are the members of the meat products industry and their market caps resemble LUK’s market cap.

With the returns exhibited by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading activity, and Leucadia National Corp. (NYSE:LUK) shareholders fit into this picture quite nicely.

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