BEAM Inc (NYSE:BEAM) was in 27 hedge funds' portfolio at the end of December. BEAM investors should be aware of a decrease in enthusiasm from smart money of late. There were 27 hedge funds in our database with BEAM positions at the end of the previous quarter.
To the average investor, there are tons of methods market participants can use to analyze the equity markets. Two of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the S&P 500 by a superb amount (see just how much).
Just as beneficial, optimistic insider trading sentiment is another way to parse down the world of equities. Just as you'd expect, there are plenty of stimuli for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this tactic if "monkeys" understand where to look (learn more here).
With all of this in mind, let's take a look at the key action surrounding BEAM Inc (NYSE:BEAM).
Heading into 2013, a total of 27 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Pershing Square, managed by Bill Ackman, holds the most valuable position in BEAM Inc (NYSE:BEAM). Pershing Square has a $1.272 billion position in the stock, comprising 13.9% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which held a $148 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Ken Griffin's Citadel Investment Group, Kenneth Mario Garschina's Mason Capital Management and James Dinan's York Capital Management.
Seeing as BEAM Inc (NYSE:BEAM) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few money managers that decided to sell off their entire stakes last quarter. Interestingly, Alexander Mitchell's Scopus Asset Management sold off the biggest position of the "upper crust" of funds we monitor, worth an estimated $32 million in stock., and Ken Gray and Steve Walsh of Bryn Mawr Capital was right behind this move, as the fund said goodbye to about $26 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, BEAM Inc (NYSE:BEAM) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the returns demonstrated by our tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and BEAM Inc (NYSE:BEAM) is no exception.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.