General Motors Company (NYSE:GM) was in 110 hedge funds’ portfolio at the end of the first quarter. GM shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 104 hedge funds in our database with GM holdings at the end of the previous quarter.
In the eyes of most investors, hedge funds are seen as unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation today, we hone in on the bigwigs of this club, about 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total asset base, and by keeping an eye on their highest performing picks, we have determined a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed 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 topped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as integral, optimistic insider trading activity is a second way to parse down the stock market universe. Obviously, there are plenty of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this method if piggybackers know where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the recent action regarding General Motors Company (NYSE:GM).
What have hedge funds been doing with General Motors Company (NYSE:GM)?
In preparation for Q2, a total of 110 of the hedge funds we track held long positions in this stock, a change of 6% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in General Motors Company (NYSE:GM). Berkshire Hathaway has a $695.5 million position in the stock, comprising 0.8% of its 13F portfolio. Coming in second is Greenlight Capital, managed by David Einhorn, which held a $589 million position; the fund has 9% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Doug Silverman and Alexander Klabin’s Senator Investment Group, Michael Novogratz’s Fortress Investment Group and William B. Gray’s Orbis Investment Management.
As industrywide interest jumped, some big names were leading the bulls’ herd. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, created the biggest call position in General Motors Company (NYSE:GM). Senator Investment Group had 375.6 million invested in the company at the end of the quarter. Brian Jackelow’s SAB Capital Management also made a $79 million investment in the stock during the quarter. The following funds were also among the new GM investors: Mohnish Pabrai’s Mohnish Pabrai, Bruce Kovner’s Caxton Associates LP, and D. E. Shaw’s D E Shaw.
How have insiders been trading General Motors Company (NYSE:GM)?
Insider buying is best served when the company in question has seen transactions within the past six months. Over the last 180-day time frame, General Motors Company (NYSE:GM) has seen 2 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to General Motors Company (NYSE:GM). These stocks are Toyota Motor Corporation (ADR) (NYSE:TM), Tata Motors Limited (ADR) (NYSE:TTM), Honda Motor Co Ltd (ADR) (NYSE:HMC), and Ford Motor Company (NYSE:F). All of these stocks are in the auto manufacturers – major industry and their market caps are similar to GM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Toyota Motor Corporation (ADR) (NYSE:TM) | 15 | 0 | 0 |
| Tata Motors Limited (ADR) (NYSE:TTM) | 22 | 0 | 0 |
| Honda Motor Co Ltd (ADR) (NYSE:HMC) | 6 | 0 | 0 |
| Ford Motor Company (NYSE:F) | 47 | 0 | 13 |
With the results shown by our research, retail investors should always watch hedge fund and insider trading sentiment, and General Motors Company (NYSE:GM) applies perfectly to this mantra.
