Is Autoliv Inc. (NYSE:ALV) a good investment?
In the eyes of many investors, hedge funds are viewed as bloated, old investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds with their doors open in present day, this site looks at the top tier of this club, about 525 funds. It is widely held that this group oversees most of the smart money’s total assets, and by keeping an eye on their highest performing equity investments, we’ve found a number of investment strategies that have historically outperformed 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 began to 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 (find the details here).
Equally as useful, positive insider trading activity is another way to analyze the stock market universe. Obviously, there are many reasons for an executive to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this tactic if “monkeys” understand what to do (learn more here).
Furthermore, it’s important to examine the newest info for Autoliv Inc. (NYSE:ALV).
How are hedge funds trading Autoliv Inc. (NYSE:ALV)?
At Q2’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully.
According to our 13F database, Natixis Global Asset Management’s Harris Associates had the biggest position in Autoliv Inc. (NYSE:ALV), worth close to $210.4 million, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $26.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Cliff Asness’s AQR Capital Management, Bill Miller’s Legg Mason Capital Management and Israel Englander’s Millennium Management.
As Autoliv Inc. (NYSE:ALV) has witnessed declining interest from the entirety of the hedge funds we track, we can see that there were a few money managers who were dropping their full holdings last quarter. It’s worth mentioning that Michael Larson’s Bill & Melinda Gates Foundation Trust dumped the biggest position of all the hedgies we key on, comprising about $8.5 million in call options., and D. E. Shaw of D E Shaw was right behind this move, as the fund cut about $1.4 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Autoliv Inc. (NYSE:ALV)
Insider buying is most useful when the company in question has experienced transactions within the past six months. Over the latest 180-day time frame, Autoliv Inc. (NYSE:ALV) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Autoliv Inc. (NYSE:ALV). These stocks are Allison Transmission Holdings Inc (NYSE:ALSN), BorgWarner Inc. (NYSE:BWA), Lear Corporation (NYSE:LEA), LKQ Corporation (NASDAQ:LKQ), and TRW Automotive Holdings Corp. (NYSE:TRW). This group of stocks are the members of the auto parts industry and their market caps resemble ALV’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Allison Transmission Holdings Inc (NYSE:ALSN) | 7 | 0 | 0 |
| BorgWarner Inc. (NYSE:BWA) | 32 | 0 | 0 |
| Lear Corporation (NYSE:LEA) | 39 | 0 | 0 |
| LKQ Corporation (NASDAQ:LKQ) | 21 | 0 | 0 |
| TRW Automotive Holdings Corp. (NYSE:TRW) | 36 | 0 | 0 |
Using the results demonstrated by the previously mentioned tactics, average investors should always watch hedge fund and insider trading sentiment, and Autoliv Inc. (NYSE:ALV) applies perfectly to this mantra.
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