International Business Machines Corp. (IBM): How Are The Bears Trading It?

At present, there are many indicators for International Business Machines Corp. (NYSE:IBM) readers to watch, but it’s absolutely crucial to take note of a company’s short sellers. A couple indicators we can use are: (a) the fraction of a company’s shares that the shorts are presently shorting, in addition to (b) the change in shorting activity.

An increased amount of bearish shorting usually indicates what you’d think: the market’s big players have become less bullish on that particular stock. Short selling that’s too high, though, may have a positive effect on share price, as short sellers may be forced to buy their stock.

At Insider Monkey, it is not a secret that we track hedge funds’ interest, but it is eqaully as important to combine this information with aggregate short sale information. In some high-profile cases, big time investors might share that they’re short on a company, but it isn’t an SEC requirement. Nonetheless, many retail investors may wish to stay away from heavily short sold companies with elevated hedgie support, while others may want short-squeeze opportunities. For those wanting a market-beating piggybacking strategy, discover the details of our premium strategy.

With that in mind, let’s take a look at the latest data swirling around International Business Machines Corp. (NYSE:IBM).

Looking at the newest FINRA short interest data, which is released twice monthly, we can realize that International Business Machines Corp. (NYSE:IBM) sports a short interest of 1.70% of float. This represents an insignificant change from the prior filing period. With a float of 1.11B shares, this is a short ratio of 4.3.

It is also beneficial to keep an eye on hedge fund holdings from their quarterly 13F filings. When analyzing the funds we track, Warren Buffett’s Berkshire Hathaway had the largest position in International Business Machines Corp. (NYSE:IBM), worth close to $14.5304 billion, comprising 17.1% of its total 13F portfolio. The 2nd biggest stake is held by Fisher Asset Management, managed by Ken Fisher, which held a $671.8 million position; 1.8% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.

Also, insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time period, International Business Machines Corp. (NYSE:IBM) has seen zero unique insiders buying, and 17 insider sales (see the details of insider trades here).

Let’s check out activity in other stocks similar to International Business Machines Corp. (NYSE:IBM). These stocks are Silicon Graphics International Corp (NASDAQ:SGI), Cray Inc. (NASDAQ:CRAY), Teradata Corporation (NYSE:TDC), , and Hewlett-Packard Company (NYSE:HPQ). This group of stocks belong to the diversified computer systems industry and their market caps are closest to IBM’s market cap.

The aforementioned indicators–short interest data, hedge fund sentiment and insider trading history–are something all investors should be aware of. Though it is difficult to find a discernable strategy from short selling filings, the latter two give plenty of market beating opportunities if you know where to look.