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Berkshire Hathaway Inc. (BRK.B): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

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Berkshire Hathaway Inc. (NYSE:BRK-B) is a favorite of many fund managers. If sentiment is stagnant, it’s at least worth wondering: who holds the stock?

If you were to ask many traders, hedge funds are seen as useless, old investment tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open today, this site looks at the top tier of this group, about 525 funds. Analysts calculate that this group oversees the majority of all hedge funds’ total assets, and by paying attention to their highest performing investments, we’ve identified a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as necessary, positive insider trading activity is a second way to look at the marketplace. Obviously, there are many motivations for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this method if you know where to look (learn more here).

Berkshire Hathaway Inc. (NYSE:BRK.B)

Keeping this in mind, we’re going to study the recent info for Berkshire Hathaway Inc. (NYSE:BRK-B).

Hedge fund activity in Berkshire Hathaway Inc. (NYSE:BRK.B)

In preparation for the third quarter, a total of 67 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.

Out of the hedge funds we follow, Michael Larson’s Bill & Melinda Gates Foundation Trust had the most valuable position in Berkshire Hathaway Inc. (NYSE:BRK.B), worth close to $8.3471 billion, comprising 46.9% of its total 13F portfolio. On Bill & Melinda Gates Foundation Trust’s heels is Boykin Curry of Eagle Capital Management, with a $1.2901 billion position; the fund has 6.9% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Tom Russo’s Gardner Russo & Gardner, Matt McLennan’s First Eagle Investment Management and D. E. Shaw’s D E Shaw.

As Berkshire Hathaway Inc. (NYSE:BRK.B) has faced bearish sentiment from upper-tier hedge fund managers, logic holds that there lies a certain “tier” of money managers who sold off their entire stakes in Q1. Interestingly, Charles de Vaulx’s International Value Advisers said goodbye to the biggest position of the 450+ funds we key on, worth about $409.9 million in stock. Charles de Vaulx’s fund, International Value Advisers, also dropped its stock, about $109.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Berkshire Hathaway Inc. (NYSE:BRK.B)?

Bullish insider trading is at its handiest when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Berkshire Hathaway Inc. (NYSE:BRK.B) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Berkshire Hathaway Inc. (NYSE:BRK.B). These stocks are Homeowners Choice Inc (NYSE:HCI), American Safety Insurance Holdings, Ltd. (NYSE:ASI), Universal Insurance Holdings, Inc. (NYSEAMEX:UVE), Hallmark Financial Services, Inc. (NASDAQ:HALL), and Fortegra Financial Corp (NYSE:FRF). This group of stocks are the members of the property & casualty insurance industry and their market caps are similar to BRK-B’s market cap.

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