Hewlett-Packard Company (NYSE:HPQ) was in 47 hedge funds’ portfolio at the end of March. HPQ investors should be aware of a decrease in hedge fund interest in recent months. There were 51 hedge funds in our database with HPQ positions at the end of the previous quarter.
If you’d ask most traders, hedge funds are seen as worthless, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at present, we hone in on the upper echelon of this club, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing stock picks, we have spotted a few investment strategies that have historically beaten 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as beneficial, optimistic insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are a variety of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if piggybackers understand what to do (learn more here).
Consequently, it’s important to take a glance at the latest action regarding Hewlett-Packard Company (NYSE:HPQ).
Hedge fund activity in Hewlett-Packard Company (NYSE:HPQ)
Heading into Q2, a total of 47 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Ralph V. Whitworth’s Relational Investors had the biggest position in Hewlett-Packard Company (NYSE:HPQ), worth close to $823.3 million, accounting for 15.8% of its total 13F portfolio. Coming in second is Pzena Investment Management, managed by Richard S. Pzena, which held a $818.3 million position; 5.7% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Andreas Halvorsen’s Viking Global, Donald Yacktman’s Yacktman Asset Management and David Cohen and Harold Levy’s Iridian Asset Management.
Seeing as Hewlett-Packard Company (NYSE:HPQ) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedgies that slashed their full holdings in Q1. Interestingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest position of all the hedgies we track, totaling close to $69.9 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund sold off about $48.1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds in Q1.
What have insiders been doing with Hewlett-Packard Company (NYSE:HPQ)?
Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, Hewlett-Packard Company (NYSE:HPQ) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over 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 in the diversified computer systems industry and their market caps are similar to 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 exhibited by the aforementioned research, everyday investors must always watch hedge fund and insider trading sentiment, and Hewlett-Packard Company (NYSE:HPQ) applies perfectly to this mantra.
