VimpelCom Ltd (ADR) (NYSE:VIP), Rogers Communications Inc. (USA) (NYSE:RCI): Should You Avoid Mobile TeleSystems OJSC (ADR) (NYSE:MBT)?

Mobile TeleSystems OJSC (ADR) (NYSE:MBT) was in 11 hedge funds’ portfolio at the end of December. MBT investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. There were 15 hedge funds in our database with MBT positions at the end of the previous quarter.

To most shareholders, hedge funds are seen as worthless, old financial vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, we hone in on the masters of this group, about 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total asset base, and by paying attention to their top equity investments, we have formulated a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as integral, positive insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this tactic if piggybackers understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the recent action regarding Mobile TeleSystems OJSC (ADR) (NYSE:MBT).

What does the smart money think about Mobile TeleSystems OJSC (ADR) (NYSE:MBT)?

Heading into 2013, a total of 11 of the hedge funds we track held long positions in this stock, a change of -27% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the largest position in Mobile TeleSystems OJSC (ADR) (NYSE:MBT), worth close to $59 million, comprising 0.3% of its total 13F portfolio. The second largest stake is held by Jane Mendillo of Harvard Management Co, with a $9 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Brian Ashford-Russell and Tim Woolley’s Polar Capital, Philippe Jabre’s Jabre Capital Partners and Robert B. Gillam’s McKinley Capital Management.

Because Mobile TeleSystems OJSC (ADR) (NYSE:MBT) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there is a sect of fund managers that decided to sell off their entire stakes heading into 2013. At the top of the heap, Jim Simons’s Renaissance Technologies sold off the biggest investment of the “upper crust” of funds we monitor, valued at an estimated $10 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund said goodbye to about $9 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 4 funds heading into 2013.

What have insiders been doing with Mobile TeleSystems OJSC (ADR) (NYSE:MBT)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last half-year time period, Mobile TeleSystems OJSC (ADR) (NYSE:MBT) has seen zero unique insiders purchasing, 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 Mobile TeleSystems OJSC (ADR) (NYSE:MBT). These stocks are Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), VimpelCom Ltd (ADR) (NYSE:VIP), Rogers Communications Inc. (USA) (NYSE:RCI), Sprint Nextel Corporation (NYSE:S), and TELUS Corporation (USA) (NYSE:TU). This group of stocks are the members of the wireless communications industry and their market caps are similar to MBT’s market cap.

With the results exhibited by our time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Mobile TeleSystems OJSC (ADR) (NYSE:MBT) is no exception.

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