This Metric Says You Are Smart to Sell Pitney Bowes Inc. (PBI)

Pitney Bowes Inc. (NYSE:PBI) has experienced a decrease in hedge fund interest in recent months.

According to most traders, hedge funds are seen as worthless, old investment tools of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the crème de la crème of this group, around 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total capital, and by paying attention to their best picks, we have unearthed a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as key, positive insider trading sentiment is another way to break down the stock market universe. There are many reasons for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this tactic if investors understand where to look (learn more here).

With all of this in mind, let’s take a gander at the latest action regarding Pitney Bowes Inc. (NYSE:PBI).

How have hedgies been trading Pitney Bowes Inc. (NYSE:PBI)?

At Q1’s end, a total of 22 of the hedge funds we track held long positions in this stock, a change of -12% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.

When looking at the hedgies we track, Steadfast Capital Management, managed by Robert Pitts, holds the most valuable position in Pitney Bowes Inc. (NYSE:PBI). Steadfast Capital Management has a $61.4 million position in the stock, comprising 1.6% of its 13F portfolio. The second largest stake is held by Chase Coleman and Feroz Dewan of Tiger Global Management LLC, with a $27.3 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Boaz Weinstein’s Saba Capital, Philippe Laffont’s Coatue Management and Ken Griffin’s Citadel Investment Group.

Because Pitney Bowes Inc. (NYSE:PBI) has witnessed a declination in interest from hedge fund managers, logic holds that there is a sect of funds that slashed their entire stakes heading into Q2. It’s worth mentioning that Matthew Tewksbury’s Stevens Capital Management sold off the biggest position of the “upper crust” of funds we key on, worth an estimated $4.6 million in stock., and David Dreman of Dreman Value Management was right behind this move, as the fund sold off about $1.8 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds heading into Q2.

What do corporate executives and insiders think about Pitney Bowes Inc. (NYSE:PBI)?

Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time period, Pitney Bowes Inc. (NYSE:PBI) has experienced 2 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Pitney Bowes Inc. (NYSE:PBI). These stocks are Knoll Inc (NYSE:KNL), HNI Corp (NYSE:HNI), Herman Miller, Inc. (NASDAQ:MLHR), Steelcase Inc. (NYSE:SCS), and VeriFone Systems Inc (NYSE:PAY). This group of stocks belong to the business equipment industry and their market caps match PBI’s market cap.

With the results shown by our research, everyday investors should always monitor hedge fund and insider trading activity, and Pitney Bowes Inc. (NYSE:PBI) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds