JPMorgan Chase & Co. (JPM): Hedge Funds Are Standing Pat

JPMorgan Chase & Co. (NYSE:JPM) has certainly faced its fair share of turmoil over the past 18 months, but shares have still been in the green, and are up a little under 18% year-to-date. Hedge fund data suggests in interesting phenomenon at play here: stagnancy. Insider sentiment is also intriguing.

To the average investor, there are plenty of metrics investors can use to watch publicly traded companies. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outclass the market by a solid margin (see just how much).

Just as necessary, positive insider trading sentiment is a second way to look at the marketplace. Obviously, there are many reasons for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if piggybackers know what to do (learn more here).

Keeping this in mind, let’s examine the recent info for JPMorgan Chase & Co. (NYSE:JPM).

Hedge fund activity in JPMorgan Chase & Co. (NYSE:JPM)

At the end of the second quarter, a total of 95 of the hedge funds we track were long in this stock, a change of 1% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully.

According to our 13F database, Natixis Global Asset Management’s Harris Associates had the biggest position in JPMorgan Chase & Co. (NYSE:JPM), worth close to $1.3482 billion, comprising 2.8% of its total 13F portfolio. On Harris Associates’s heels is Lansdowne Partners, managed by Paul Ruddock and Steve Heinz, which held a $804.6 million position; 10.2% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Ken Fisher’s Fisher Asset Management, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.

As one would understandably expect, certain money managers have been driving this bullishness. Lansdowne Partners, managed by Paul Ruddockáand Steve Heinz, created the most outsized position in JPMorgan Chase & Co. (NYSE:JPM). Lansdowne Partners had 804.6 million invested in the company at the end of the quarter. Ken Fisher’s Fisher Asset Management also made a $691 million investment in the stock during the quarter. The following funds were also among the new JPM investors: Phill Gross and Robert Atchinson’s Adage Capital Management, D. E. Shaw’s D E Shaw, and Richard S. Pzena’s Pzena Investment Management.

How are insiders trading JPMorgan Chase & Co. (NYSE:JPM)?

Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the last 180-day time period, JPMorgan Chase & Co. (NYSE:JPM) has experienced 1 unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to JPMorgan Chase & Co. (NYSE:JPM). These stocks are Toronto-Dominion Bank (USA) (NYSE:TD), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), and Wells Fargo & Co (NYSE:WFC). This group of stocks belong to the money center banks industry and their market caps are closest to JPM’s market cap.