BlackRock, Inc. (NYSE:BLK) has seen a decrease in hedge fund interest in recent months.
If you’d ask most market participants, hedge funds are viewed as worthless, old financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, we hone in on the leaders of this group, around 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total capital, and by watching their best stock picks, we have identified a few investment strategies that have historically beaten the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, bullish insider trading activity is a second way to parse down the marketplace. Obviously, there are many motivations for an insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).
Now, it’s important to take a gander at the recent action encompassing BlackRock, Inc. (NYSE:BLK).
What have hedge funds been doing with BlackRock, Inc. (NYSE:BLK)?
At year’s end, a total of 27 of the hedge funds we track were long in this stock, a change of -7% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Legg Mason Capital Management, managed by Bill Miller, holds the most valuable position in BlackRock, Inc. (NYSE:BLK). Legg Mason Capital Management has a $99 million position in the stock, comprising 1.7% of its 13F portfolio. On Legg Mason Capital Management’s heels is Jonathon Jacobson of Highfields Capital Management, with a $86 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, and Charles Davidson’s Wexford Capital.
Due to the fact that BlackRock, Inc. (NYSE:BLK) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedge funds that decided to sell off their entire stakes last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of the “upper crust” of funds we key on, worth close to $66 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund cut about $40 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds last quarter.
What have insiders been doing with BlackRock, Inc. (NYSE:BLK)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has seen transactions within the past half-year. Over the latest six-month time period, BlackRock, Inc. (NYSE:BLK) has seen 2 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the results shown by our studies, retail investors should always pay attention to hedge fund and insider trading activity, and BlackRock, Inc. (NYSE:BLK) applies perfectly to this mantra.
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