Nippon Telegraph & Telephone Corp (ADR) (NTT): Hedge Funds and Insiders Are Bearish, What Should You Do?: France Telecom SA (ADR) (FTE), BT Group plc (ADR) (BT)

Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) shareholders have witnessed a decrease in support from the world’s most elite money managers lately.

If you’d ask most stock holders, hedge funds are viewed as worthless, outdated investment vehicles of years past. While there are greater than 8000 funds trading today, we look at the upper echelon of this club, about 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total asset base, and by paying attention to their best stock picks, we have uncovered a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Equally as beneficial, bullish insider trading activity is another way to parse down the world of equities. Obviously, there are a variety of stimuli for an executive to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand where to look (learn more here).

With all of this in mind, we’re going to take a glance at the key action surrounding Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT).

How are hedge funds trading Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT)?

Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT). Renaissance Technologies has a $55 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $24 million position; 0% of its 13F portfolio is allocated to the company. Other peers with similar optimism include D. E. Shaw’s D E Shaw, David Dreman’s Dreman Value Management and Israel Englander’s Millennium Management.

Judging by the fact that Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few funds who sold off their entire stakes last quarter. It’s worth mentioning that Jeffrey Vinik’s Vinik Asset Management cut the biggest investment of the 450+ funds we track, totaling close to $6 million in stock. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT)?

Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time frame, Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) has seen zero unique insiders buying, 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 Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT). These stocks are France Telecom SA (ADR) (NYSE:FTE), BT Group plc (ADR) (NYSE:BT), China Telecom Corporation Limited (ADR) (NYSE:CHA), NTT Docomo Inc (ADR) (NYSE:DCM), and Telefonica S.A. (ADR) (NYSE:TEF). This group of stocks belong to the telecom services – foreign industry and their market caps resemble NTT’s market cap.

With the results demonstrated by the aforementioned time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) shareholders fit into this picture quite nicely.

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