Lowe’s Companies, Inc. (NYSE:LOW) shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently.
In the eyes of most traders, hedge funds are assumed to be underperforming, old financial tools of years past. While there are greater than 8000 funds trading at present, we at Insider Monkey look at the elite of this group, around 450 funds. It is widely believed that this group oversees the lion’s share of all hedge funds’ total capital, and by paying attention to their highest performing picks, we have identified a few investment strategies that have historically outperformed the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as integral, positive insider trading activity is another way to parse down the marketplace. Obviously, there are lots of incentives for an insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
Now, we’re going to take a gander at the key action surrounding Lowe’s Companies, Inc. (NYSE:LOW).
How have hedgies been trading Lowe’s Companies, Inc. (NYSE:LOW)?
At the end of the fourth quarter, a total of 43 of the hedge funds we track were bullish in this stock, a change of -7% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Edgar Wachenheim’s Greenhaven Associates had the biggest position in Lowe’s Companies, Inc. (NYSE:LOW), worth close to $428 million, accounting for 13% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $227 million position; 0.7% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Bill Miller’s Legg Mason Capital Management and Lou Simpson’s SQ Advisors.
Because Lowe’s Companies, Inc. (NYSE:LOW) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers who sold off their full holdings last quarter. Intriguingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC sold off the largest position of the “upper crust” of funds we monitor, valued at an estimated $166 million in stock., and Jonathon Jacobson of Highfields Capital Management was right behind this move, as the fund dumped about $96 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
How have insiders been trading Lowe’s Companies, Inc. (NYSE:LOW)?
Insider purchases made by high-level executives is best served when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Lowe’s Companies, Inc. (NYSE:LOW) has experienced zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).
With the results exhibited by our tactics, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Lowe’s Companies, Inc. (NYSE:LOW) is an important part of this process.
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