U.S. Bancorp (NYSE:USB) has experienced a decrease in activity from the world’s largest hedge funds in recent months.
If you’d ask most shareholders, hedge funds are perceived as unimportant, outdated financial vehicles of the past. While there are greater than 8000 funds in operation today, we look at the leaders of this group, around 450 funds. It is widely believed that this group controls most of all hedge funds’ total capital, and by monitoring their top stock picks, we have unearthed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as important, positive insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are many incentives for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this tactic if shareholders know where to look (learn more here).
Consequently, it’s important to take a glance at the latest action surrounding U.S. Bancorp (NYSE:USB).
What does the smart money think about U.S. Bancorp (NYSE:USB)?
At year’s end, a total of 43 of the hedge funds we track held long positions in this stock, a change of -10% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in U.S. Bancorp (NYSE:USB). Berkshire Hathaway has a $1.957 billion position in the stock, comprising 2.6% of its 13F portfolio. Sitting at the No. 2 spot is Donald Yacktman of Yacktman Asset Management, with a $405 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Jean-Marie Eveillard’s First Eagle Investment Management, Ken Griffin’s Citadel Investment Group and Prem Watsa’s Fairfax Financial Holdings.
Due to the fact that U.S. Bancorp (NYSE:USB) has witnessed declining sentiment from the smart money, we can see that there were a few hedgies that slashed their full holdings in Q4. It’s worth mentioning that Louis Bacon’s Moore Global Investments dumped the largest investment of the 450+ funds we watch, valued at an estimated $105 million in stock.. Andreas Halvorsen’s fund, Viking Global, also cut its stock, about $50 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 5 funds in Q4.
How are insiders trading U.S. Bancorp (NYSE:USB)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past six months. Over the last half-year time period, U.S. Bancorp (NYSE:USB) has experienced zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned tactics, retail investors must always monitor hedge fund and insider trading activity, and U.S. Bancorp (NYSE:USB) applies perfectly to this mantra.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
