Is WPP PLC (ADR) (WPPGY) Going to Burn These Hedge Funds?

WPP PLC (ADR) (NASDAQ:WPPGY) was in 7 hedge funds’ portfolio at the end of the first quarter of 2013. WPPGY has seen a decrease in enthusiasm from smart money of late. There were 8 hedge funds in our database with WPPGY holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are dozens of gauges market participants can use to analyze Mr. Market. A pair of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the broader indices by a very impressive amount (see just how much).

Equally as key, positive insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are many incentives for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).

Consequently, let’s take a look at the latest action surrounding WPP PLC (ADR) (NASDAQ:WPPGY).

What does the smart money think about WPP PLC (ADR) (NASDAQ:WPPGY)?

At Q1’s end, a total of 7 of the hedge funds we track were long in this stock, a change of -13% from one quarter earlier.

Due to the fact that WPP PLC (ADR) (NASDAQ:WPPGY) has witnessed a declination in interest from hedge fund managers, logic holds that there lies a certain “tier” of fund managers that elected to cut their positions entirely last quarter. Interestingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest stake of all the hedgies we monitor, worth about $2.1 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $0.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

Insider trading activity in WPP PLC (ADR) (NASDAQ:WPPGY)

Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past six months. Over the latest six-month time frame, WPP PLC (ADR) (NASDAQ:WPPGY) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to WPP PLC (ADR) (NASDAQ:WPPGY). These stocks are Monster Worldwide, Inc. (NYSE:MWW), Focus Media Holding Limited (ADR) (NASDAQ:FMCN), Lamar Advertising Co (NASDAQ:LAMR), Interpublic Group of Companies Inc (NYSE:IPG), and Omnicom Group Inc. (NYSE:OMC). All of these stocks are in the advertising agencies industry and their market caps resemble WPPGY’s market cap.

With the returns shown by our strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and WPP PLC (ADR) (NASDAQ:WPPGY) applies perfectly to this mantra.

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