Tyco International Ltd. (NYSE:TYC) was in 45 hedge funds’ portfolio at the end of March. TYC has seen an increase in activity from the world’s largest hedge funds lately. There were 44 hedge funds in our database with TYC holdings at the end of the previous quarter.
To most market participants, hedge funds are viewed as unimportant, outdated investment vehicles of the past. While there are greater than 8000 funds trading at present, we at Insider Monkey choose to focus on the bigwigs of this group, about 450 funds. Most estimates calculate that this group controls most of the smart money’s total capital, and by keeping an eye on their best investments, we have uncovered a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, bullish insider trading sentiment is another way to break down the marketplace. Obviously, there are a variety of reasons for an insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this strategy if you understand where to look (learn more here).
Now, we’re going to take a gander at the latest action regarding Tyco International Ltd. (NYSE:TYC).
How have hedgies been trading Tyco International Ltd. (NYSE:TYC)?
In preparation for this quarter, a total of 45 of the hedge funds we track held long positions in this stock, a change of 2% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the largest position in Tyco International Ltd. (NYSE:TYC). Iridian Asset Management has a $227.2 million position in the stock, comprising 3.3% of its 13F portfolio. On Iridian Asset Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $174.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, Daniel S. Och’s OZ Management and Jean-Marie Eveillard’s First Eagle Investment Management.
As one would reasonably expect, key money managers were leading the bulls’ herd. Relational Investors, managed by Ralph V. Whitworth, created the most valuable position in Tyco International Ltd. (NYSE:TYC). Relational Investors had 101.6 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $35.1 million position during the quarter. The following funds were also among the new TYC investors: Louis Bacon’s Moore Global Investments, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Steven Cohen’s SAC Capital Advisors.
What do corporate executives and insiders think about Tyco International Ltd. (NYSE:TYC)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Tyco International Ltd. (NYSE:TYC) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Tyco International Ltd. (NYSE:TYC). These stocks are Checkpoint Systems, Inc. (NYSE:CKP), Ascent Capital Group Inc (NASDAQ:ASCMA), Brink’S Co (NYSE:BCO), The Geo Group, Inc. (NYSE:GEO), and ADT Corp (NYSE:ADT). All of these stocks are in the security & protection services industry and their market caps are similar to TYC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Checkpoint Systems, Inc. (NYSE:CKP) | 15 | 1 | 0 |
| Ascent Capital Group Inc (NASDAQ:ASCMA) | 16 | 1 | 0 |
| Brink’S Co (NYSE:BCO) | 17 | 0 | 2 |
| The Geo Group, Inc. (NYSE:GEO) | 20 | 0 | 11 |
| ADT Corp (NYSE:ADT) | 56 | 1 | 2 |
With the results exhibited by our time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Tyco International Ltd. (NYSE:TYC) shareholders fit into this picture quite nicely.
