Is Cellcom Israel Ltd. (NYSE:CEL) going to take off soon? Money managers are taking a bullish view. The number of long hedge fund bets rose by 3 in recent months.
In the eyes of most stock holders, hedge funds are seen as worthless, outdated investment tools of the past. While there are more than 8000 funds in operation at present, we choose to focus on the masters of this group, about 450 funds. It is widely believed that this group has its hands on the lion's share of the smart money's total asset base, and by keeping an eye on their highest performing picks, we have determined a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat 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 24 percentage points in 7 months (see all of our picks from August).
Equally as important, optimistic insider trading activity is a second way to break down the marketplace. There are plenty of reasons for an executive to sell shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, we're going to take a peek at the key action regarding Cellcom Israel Ltd. (NYSE:CEL).
At the end of the fourth quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of 50% from one quarter earlier. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings substantially.
Of the funds we track, Jim Simons's Renaissance Technologies had the largest position in Cellcom Israel Ltd. (NYSE:CEL), worth close to $25 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $1.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Israel Englander's Millennium Management, Neil Chriss's Hutchin Hill Capital and Mike Vranos's Ellington.
Now, key hedge funds were leading the bulls' herd. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in Cellcom Israel Ltd. (NYSE:CEL). Citadel Investment Group had 1.4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $1 million position during the quarter. The only other fund with a brand new CEL position is Steven Cohen's SAC Capital Advisors.
Bullish insider trading is at its handiest when the company we're looking at has seen transactions within the past six months. Over the last 180-day time frame, Cellcom Israel Ltd. (NYSE:CEL) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Cellcom Israel Ltd. (NYSE:CEL). These stocks are Pendrell Corporation - Class A (NASDAQ:PCO), Leap Wireless International, Inc. (NASDAQ:LEAP), Ubiquiti Networks Inc (NASDAQ:UBNT), Partner Communications Company Ltd (ADR) (NASDAQ:PTNR), and NII Holdings, Inc. (NASDAQ:NIHD). This group of stocks belong to the wireless communications industry and their market caps are closest to CEL's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Pendrell Corporation - Class A (NASDAQ:PCO)||10||0||1|
|Leap Wireless International, Inc. (NASDAQ:LEAP)||15||0||5|
|Ubiquiti Networks Inc (NASDAQ:UBNT)||6||0||6|
|Partner Communications Company Ltd (ADR) (NASDAQ:PTNR)||7||0||0|
|NII Holdings, Inc. (NASDAQ:NIHD)||18||0||0|
With the results demonstrated by our studies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Cellcom Israel Ltd. (NYSE:CEL) is an important part of this process.