TD Ameritrade Holding Corp. (NYSE:AMTD) shareholders have witnessed a decrease in hedge fund interest recently.
According to most shareholders, hedge funds are seen as slow, old investment vehicles of the past. While there are greater than 8000 funds with their doors open today, we look at the leaders of this group, close to 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total asset base, and by watching their top equity investments, we have revealed a number of investment strategies that have historically beaten Mr. Market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as key, positive insider trading activity is another way to parse down the financial markets. Obviously, there are a variety of stimuli for an executive to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this tactic if piggybackers understand what to do (learn more here).
Now, let’s take a gander at the latest action regarding TD Ameritrade Holding Corp. (NYSE:AMTD).
How are hedge funds trading TD Ameritrade Holding Corp. (NYSE:AMTD)?
At the end of the fourth quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of -41% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in TD Ameritrade Holding Corp. (NYSE:AMTD). Renaissance Technologies has a $53.6 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Akre Capital Management, managed by Charles Akre, which held a $53.2 million position; the fund has 3.8% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Bill Miller’s Legg Mason Capital Management and Israel Englander’s Millennium Management.
Because TD Ameritrade Holding Corp. (NYSE:AMTD) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few fund managers who were dropping their entire stakes last quarter. At the top of the heap, Steven Cohen’s SAC Capital Advisors dropped the biggest stake of all the hedgies we watch, worth an estimated $57.5 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund dumped about $20.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 9 funds last quarter.
How are insiders trading TD Ameritrade Holding Corp. (NYSE:AMTD)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past 180 days. Over the latest six-month time frame, TD Ameritrade Holding Corp. (NYSE:AMTD) has experienced 2 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to TD Ameritrade Holding Corp. (NYSE:AMTD). These stocks are E TRADE Financial Corporation (NASDAQ:ETFC), LPL Financial Holdings Inc (NASDAQ:LPLA), Nomura Holdings, Inc. (ADR) (NYSE:NMR), Charles Schwab Corp (NYSE:SCHW), and CME Group Inc (NASDAQ:CME). This group of stocks are the members of the investment brokerage – national industry and their market caps resemble AMTD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| E TRADE Financial Corporation (NASDAQ:ETFC) | 30 | 0 | 1 |
| LPL Financial Holdings Inc (NASDAQ:LPLA) | 12 | 0 | 4 |
| Nomura Holdings, Inc. (ADR) (NYSE:NMR) | 5 | 0 | 0 |
| Charles Schwab Corp (NYSE:SCHW) | 27 | 0 | 5 |
| CME Group Inc (NASDAQ:CME) | 31 | 0 | 8 |
With the results exhibited by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and TD Ameritrade Holding Corp. (NYSE:AMTD) is an important part of this process.
