What Hedge Funds Think About Goldman Sachs Group, Inc. (GS)

Goldman Sachs Group, Inc. (NYSE:GS) investors have likely seen every data point out there, except this one. It’s unique.

If you were to ask many investors, hedge funds are perceived as useless, old investment tools of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey focuses on the elite of this club, close to 525 funds. Analysts calculate that this group controls the lion’s share of the hedge fund industry’s total capital, and by paying attention to their highest performing investments, we’ve determined a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as key, positive insider trading sentiment is a second way to look at the stock market universe. There are a number of reasons for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).

Furthermore, let’s discuss the latest info for Goldman Sachs Group, Inc. (NYSE:GS).

Hedge fund activity in Goldman Sachs Group, Inc. (NYSE:GS)

At Q2’s end, a total of 57 of the hedge funds we track held long positions in this stock, a change of -5% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially.

Out of the hedge funds we follow, Boykin Curry’s Eagle Capital Management had the most valuable position in Goldman Sachs Group, Inc. (NYSE:GS), worth close to $401.8 million, comprising 2.2% of its total 13F portfolio. Coming in second is Harris Associates, managed by Natixis Global Asset Management, which held a $321.4 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Richard S. Pzena’s Pzena Investment Management, William B. Gray’s Orbis Investment Management and Cliff Asness’s AQR Capital Management.

Because Goldman Sachs Group, Inc. (NYSE:GS) has faced a fall in interest from the smart money’s best and brightest, it’s safe to say that there were a few fund managers that slashed their full holdings at the end of the second quarter. Intriguingly, Andreas Halvorsen’s Viking Global cut the largest position of all the hedgies we key on, valued at an estimated $90 million in stock, and Paul Ruddockáand Steve Heinz of Lansdowne Partners was right behind this move, as the fund said goodbye to about $38.1 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds at the end of the second quarter.

Insider trading activity in Goldman Sachs Group, Inc. (NYSE:GS)

Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the latest half-year time period, Goldman Sachs Group, Inc. (NYSE:GS) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Goldman Sachs Group, Inc. (NYSE:GS). These stocks are CBOE Holdings, Inc (NASDAQ:CBOE), Ares Capital Corporation (NASDAQ:ARCC), NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), NYSE Euronext (NYSE:NYX), and IntercontinentalExchange Inc (NYSE:ICE). This group of stocks are in the diversified investments industry and their market caps are similar to GS’s market cap.

Using the results shown by our analyses, regular investors should always keep one eye on hedge fund and insider trading activity, and Goldman Sachs Group, Inc. (NYSE:GS) is no exception.

Discover how hedge fund piggybacking can benefit you