In the 21st century investor’s toolkit, there are tons of methods investors can use to analyze the equity markets. A couple of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can trounce the broader indices by a healthy margin (see just how much).
Equally as key, bullish insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are a variety of motivations for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action regarding Hewlett-Packard Company (NYSE:HPQ).
How have hedgies been trading Hewlett-Packard Company (NYSE:HPQ)?
At the end of the first quarter, a total of 47 of the hedge funds we track held long positions in this stock, a change of -8% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Relational Investors, managed by Ralph V. Whitworth, holds the largest position in Hewlett-Packard Company (NYSE:HPQ). Relational Investors has a $823.3 million position in the stock, comprising 15.8% of its 13F portfolio. The second largest stake is held by Pzena Investment Management, managed by Richard S. Pzena, which held a $818.3 million position; the fund has 5.7% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Andreas Halvorsen’s Viking Global, Donald Yacktman’s Yacktman Asset Management and David Cohen and Harold Levy’s Iridian Asset Management.
Judging by the fact that Hewlett-Packard Company (NYSE:HPQ) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds that slashed their positions entirely in Q1. It’s worth mentioning that Jim Simons’s Renaissance Technologies dropped the biggest stake of the 450+ funds we monitor, worth close to $69.9 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dropped its stock, about $48.1 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds in Q1.
Insider trading activity in Hewlett-Packard Company (NYSE:HPQ)
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last six-month time period, Hewlett-Packard Company (NYSE:HPQ) has experienced zero unique insiders buying, 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 Hewlett-Packard Company (NYSE:HPQ). These stocks are Silicon Graphics International Corp (NASDAQ:SGI), Cray Inc. (NASDAQ:CRAY), International Business Machines Corp. (NYSE:IBM), and Teradata Corporation (NYSE:TDC). This group of stocks are the members of the diversified computer systems industry and their market caps match HPQ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Silicon Graphics International Corp (NASDAQ:SGI) | 15 | 1 | 5 |
| Cray Inc. (NASDAQ:CRAY) | 17 | 0 | 10 |
| International Business Machines Corp. (NYSE:IBM) | 49 | 0 | 17 |
| Teradata Corporation (NYSE:TDC) | 25 | 0 | 4 |
With the results demonstrated by the aforementioned studies, retail investors should always monitor hedge fund and insider trading sentiment, and Hewlett-Packard Company (NYSE:HPQ) applies perfectly to this mantra.
