Is General Motors Company (NYSE:GM) a buy, sell, or hold? The smart money is becoming hopeful. The number of bullish hedge fund positions increased by 6 recently.
According to most stock holders, hedge funds are seen as unimportant, outdated investment tools of years past. While there are more than 8000 funds in operation at present, we look at the masters of this group, around 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by paying attention to their best investments, we have unsheathed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as beneficial, optimistic insider trading sentiment is a second way to break down the financial markets. Just as you’d expect, there are lots of reasons for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if “monkeys” know where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the key action surrounding General Motors Company (NYSE:GM).
What does the smart money think about General Motors Company (NYSE:GM)?
At the end of the first quarter, a total of 110 of the hedge funds we track were bullish in this stock, a change of 6% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Berkshire Hathaway, managed by Warren Buffett, holds the largest position in General Motors Company (NYSE:GM). Berkshire Hathaway has a $695.5 million position in the stock, comprising 0.8% of its 13F portfolio. Coming in second is David Einhorn of Greenlight Capital, with a $589 million position; 9% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Doug Silverman and Alexander Klabin’s Senator Investment Group, Michael Novogratz’s Fortress Investment Group and William B. Gray’s Orbis Investment Management.
Consequently, some big names have jumped into General Motors Company (NYSE:GM) headfirst. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, established the most valuable call position in General Motors Company (NYSE:GM). Senator Investment Group had 375.6 million invested in the company at the end of the quarter. Brian Jackelow’s SAB Capital Management also initiated a $79 million position during the quarter. The other funds with new positions in the stock are Mohnish Pabrai’s Mohnish Pabrai, Bruce Kovner’s Caxton Associates LP, and D. E. Shaw’s D E Shaw.
What have insiders been doing with General Motors Company (NYSE:GM)?
Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past 180 days. Over the latest six-month time frame, General Motors Company (NYSE:GM) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and General Motors Company (NYSE:GM) is no exception.