The Clorox Company (CLX): Are Hedge Funds Right About This Stock?

The Clorox Company (NYSE:CLX) was in 19 hedge funds’ portfolio at the end of the first quarter of 2013. CLX has experienced a decrease in enthusiasm from smart money in recent months. There were 19 hedge funds in our database with CLX holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are a multitude of metrics shareholders can use to track publicly traded companies. A couple of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the S&P 500 by a solid margin (see just how much).

Equally as key, bullish insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are many stimuli for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, we’re going to take a gander at the key action regarding The Clorox Company (NYSE:CLX).

What does the smart money think about The Clorox Company (NYSE:CLX)?

At Q1’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially.

According to our comprehensive database, Donald Yacktman’s Yacktman Asset Management had the largest position in The Clorox Company (NYSE:CLX), worth close to $608.7 million, comprising 3.1% of its total 13F portfolio. On Yacktman Asset Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $47.3 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Jim Simons’s Renaissance Technologies, and Andrew Sandler’s Sandler Capital Management.

Due to the fact that The Clorox Company (NYSE:CLX) has faced a declination in interest from the smart money, logic holds that there exists a select few money managers that slashed their positions entirely at the end of the first quarter. At the top of the heap, Christian Leone’s Luxor Capital Group sold off the largest investment of all the hedgies we key on, worth close to $36.5 million in call options, and Andy Redleaf of Whitebox Advisors was right behind this move, as the fund cut about $0.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading The Clorox Company (NYSE:CLX)?

Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time period, The Clorox Company (NYSE:CLX) has experienced 1 unique insiders purchasing, and 13 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to The Clorox Company (NYSE:CLX). These stocks are Libbey Inc. (NYSEAMEX:LBY), Helen of Troy Limited (NASDAQ:HELE), Jarden Corp (NYSE:JAH), and Newell Rubbermaid Inc. (NYSE:NWL). This group of stocks belong to the housewares & accessories industry and their market caps are similar to CLX’s market cap.

With the results shown by our strategies, retail investors must always pay attention to hedge fund and insider trading activity, and The Clorox Company (NYSE:CLX) is no exception.

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