Is Willis Group Holdings PLC (NYSE:WSH) a healthy stock for your portfolio? Money managers are selling. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
To most traders, hedge funds are viewed as slow, old investment vehicles of years past. While there are more than 8000 funds trading at present, we look at the aristocrats of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by watching their highest performing equity investments, we have formulated a number of 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 per year 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 outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, optimistic insider trading sentiment is another way to parse down the marketplace. Obviously, there are plenty of stimuli for an executive to downsize shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the latest action regarding Willis Group Holdings PLC (NYSE:WSH).
How have hedgies been trading Willis Group Holdings PLC (NYSE:WSH)?
In preparation for this year, a total of 18 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.
Of the funds we track, ValueAct Capital, managed by Jeffrey Ubben, holds the largest position in Willis Group Holdings PLC (NYSE:WSH). ValueAct Capital has a $378.4 million position in the stock, comprising 4.8% of its 13F portfolio. Sitting at the No. 2 spot is First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $202.2 million position; 0.7% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Mason Hawkins’s Southeastern Asset Management, Richard S. Pzena’s Pzena Investment Management and D. E. Shaw’s D E Shaw.
Due to the fact that Willis Group Holdings PLC (NYSE:WSH) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds that elected to cut their positions entirely at the end of the year. It’s worth mentioning that Boykin Curry’s Eagle Capital Management dumped the largest stake of the 450+ funds we track, valued at about $28.8 million in stock.. Richard Rubin’s fund, Hawkeye Capital, also sold off its stock, about $22.2 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Willis Group Holdings PLC (NYSE:WSH)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time frame, Willis Group Holdings PLC (NYSE:WSH) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Willis Group Holdings PLC (NYSE:WSH). These stocks are Marsh & McLennan Companies, Inc. (NYSE:MMC), Aon PLC (NYSE:AON), Erie Indemnity Company (NASDAQ:ERIE), Brown & Brown, Inc. (NYSE:BRO), and Arthur J. Gallagher & Co. (NYSE:AJG). This group of stocks are in the insurance brokers industry and their market caps resemble WSH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Marsh & McLennan Companies, Inc. (NYSE:MMC) | 23 | 1 | 7 |
| Aon PLC (NYSE:AON) | 28 | 1 | 4 |
| Erie Indemnity Company (NASDAQ:ERIE) | 9 | 1 | 2 |
| Brown & Brown, Inc. (NYSE:BRO) | 18 | 1 | 8 |
| Arthur J. Gallagher & Co. (NYSE:AJG) | 11 | 0 | 11 |
With the results demonstrated by the aforementioned strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Willis Group Holdings PLC (NYSE:WSH) is an important part of this process.
