Citigroup Inc. (NYSE:C) has the best international banking portfolio of the "Big Four." Generally speaking, a greater presence in emerging markets means better growth prospects than its domestically focused peers, and the valuation is still cheap. With that in mind, perhaps it's not a surprise that aggregate hedge fund data is positive for Citi.
In today’s marketplace, there are plenty of indicators investors can use to analyze Mr. Market. A duo of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can beat the broader indices by a healthy margin (see just how much).
Just as crucial, positive insider trading sentiment is another way to analyze the marketplace. Obviously, there are a variety of stimuli for an executive to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this strategy if shareholders understand where to look (learn more here).
What's more, we're going to study the recent info surrounding Citigroup Inc. (NYSE:C).
At Q2's end, a total of 121 of the hedge funds we track held long positions in this stock, a change of 3% from one quarter earlier. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings substantially.
Out of the hedge funds we follow, David Tepper's Appaloosa Management LP had the largest position in Citigroup Inc. (NYSE:C), worth close to $460.6 million, comprising 6.7% of its total 13F portfolio. Sitting at the No. 2 spot is Pzena Investment Management, managed by Richard S. Pzena, which held a $404 million position; 2.7% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include D. E. Shaw's D E Shaw, John Griffin's Blue Ridge Capital and Ken Heebner's Capital Growth Management.
Now, certain bigger names have jumped into Citigroup Inc. (NYSE:C) headfirst. Appaloosa Management LP, managed by David Tepper, initiated the biggest position in Citigroup Inc. (NYSE:C). Appaloosa Management LP had 460.6 million invested in the company at the end of the quarter. Richard S. Pzena's Pzena Investment Management also initiated a $404 million position during the quarter. The following funds were also among the new C investors: D. E. Shaw's D E Shaw, John Griffin's Blue Ridge Capital, and Ken Heebner's Capital Growth Management.
Bullish insider trading is particularly usable when the company in focus has seen transactions within the past six months. Over the latest six-month time frame, Citigroup Inc. (NYSE:C) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Citigroup Inc. (NYSE:C). These stocks are Toronto-Dominion Bank (USA) (NYSE:TD), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), Wells Fargo & Co (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM), and Bank of America Corp (NYSE:BAC). All of these stocks are in the money center banks industry and their market caps are closest to C's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Toronto-Dominion Bank (USA) (NYSE:TD)||11||0||0|
|Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU)||14||0||0|
|Wells Fargo & Co (NYSE:WFC)||76||0||10|
|JPMorgan Chase & Co. (NYSE:JPM)||95||1||9|
|Bank of America Corp (NYSE:BAC)||85||1||3|
Using the returns demonstrated by Insider Monkey's research, regular investors should always keep one eye on hedge fund and insider trading sentiment, and Citigroup Inc. (NYSE:C) is an important part of this process.