To many investors, hedge funds are viewed as useless, outdated financial vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds trading in present day, Insider Monkey focuses on the aristocrats of this group, close to 525 funds. Analysts calculate that this group controls most of the smart money’s total capital, and by monitoring their best stock picks, we’ve deciphered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as key, positive insider trading sentiment is a second way to look at the stock market universe. As the old adage goes: there are a variety of incentives for an executive to sell shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).
Keeping this in mind, it’s important to discuss the recent info surrounding VimpelCom Ltd (ADR) (NYSE:VIP).
What have hedge funds been doing with VimpelCom Ltd (ADR) (NYSE:VIP)?
Heading into Q3, a total of 12 of the hedge funds we track held long positions in this stock, a change of 33% from the first quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially.
Out of the hedge funds we follow, Rob Citrone’s Discovery Capital Management had the largest position in VimpelCom Ltd (ADR) (NYSE:VIP), worth close to $114.2 million, accounting for 1.2% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Patrik Brummer’s Zenit Asset Management AB and Mario Gabelli’s GAMCO Investors.
As industrywide interest increased, certain money managers have jumped into VimpelCom Ltd (ADR) (NYSE:VIP) headfirst. Discovery Capital Management, managed by Rob Citrone, established the most valuable position in VimpelCom Ltd (ADR) (NYSE:VIP). Discovery Capital Management had 114.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $9 million investment in the stock during the quarter. The other funds with brand new VIP positions are Jim Simons’s Renaissance Technologies, Patrik Brummer’s Zenit Asset Management AB, and Mario Gabelli’s GAMCO Investors.
What have insiders been doing with VimpelCom Ltd (ADR) (NYSE:VIP)?
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, VimpelCom Ltd (ADR) (NYSE:VIP) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to VimpelCom Ltd (ADR) (NYSE:VIP). These stocks are TELUS Corporation (USA) (NYSE:TU), Mobile TeleSystems OJSC (ADR) (NYSE:MBT), Sprint Nextel Corporation (NYSE:S), SK Telecom Co., Ltd. (ADR) (NYSE:SKM), and Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC). This group of stocks are the members of the wireless communications industry and their market caps are similar to VIP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| TELUS Corporation (USA) (NYSE:TU) | 8 | 0 | 0 |
| Mobile TeleSystems OJSC (ADR) (NYSE:MBT) | 18 | 0 | 0 |
| Sprint Nextel Corporation (NYSE:S) | 54 | 0 | 0 |
| SK Telecom Co., Ltd. (ADR) (NYSE:SKM) | 9 | 0 | 0 |
| Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC) | 11 | 0 | 0 |
Using the results shown by the previously mentioned strategies, average investors must always keep one eye on hedge fund and insider trading sentiment, and VimpelCom Ltd (ADR) (NYSE:VIP) is no exception.
