Is America Movil SAB de CV (ADR) (NYSE:AMX) a good investment right now? The smart money is reducing their bets on the stock. The number of long hedge fund positions were cut by 4 recently.
If you’d ask most shareholders, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are greater than 8000 funds in operation at the moment, we look at the upper echelon of this group, close to 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by keeping an eye on their best stock picks, we have formulated a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as important, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are a number of reasons for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).
Consequently, let’s take a look at the latest action regarding America Movil SAB de CV (ADR) (NYSE:AMX).
How have hedgies been trading America Movil SAB de CV (ADR) (NYSE:AMX)?
At the end of the fourth quarter, a total of 17 of the hedge funds we track were long in this stock, a change of -19% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings substantially.
Of the funds we track, Ken Fisher’s Fisher Asset Management had the most valuable position in America Movil SAB de CV (ADR) (NYSE:AMX), worth close to $279 million, accounting for 0.8% of its total 13F portfolio. The second largest stake is held by John Griffin of Blue Ridge Capital, with a $106 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jonathon Jacobson’s Highfields Capital Management, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.
Seeing as America Movil SAB de CV (ADR) (NYSE:AMX) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that decided to sell off their positions entirely in Q4. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the biggest position of the “upper crust” of funds we watch, valued at an estimated $157 million in stock.. Anthony Bozza’s fund, Lakewood Capital Management, also dumped its stock, about $14 million worth. These transactions are important to note, as total hedge fund interest fell by 4 funds in Q4.
What have insiders been doing with America Movil SAB de CV (ADR) (NYSE:AMX)?
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time frame, America Movil SAB de CV (ADR) (NYSE:AMX) 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 America Movil SAB de CV (ADR) (NYSE:AMX). These stocks are Rogers Communications Inc. (USA) (NYSE:RCI), China Mobile Ltd. (ADR) (NYSE:CHL), Telefonica Brasil SA (ADR) (NYSE:VIV), China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU), and Vodafone Group Plc (ADR) (NASDAQ:VOD). All of these stocks are in the wireless communications industry and their market caps are similar to AMX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Rogers Communications Inc. (USA) (NYSE:RCI)||7||0||0|
|China Mobile Ltd. (ADR) (NYSE:CHL)||14||0||0|
|Telefonica Brasil SA (ADR) (NYSE:VIV)||5||0||0|
|China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU)||2||0||0|
|Vodafone Group Plc (ADR) (NASDAQ:VOD)||33||0||0|
With the returns exhibited by Insider Monkey’s tactics, retail investors should always monitor hedge fund and insider trading sentiment, and America Movil SAB de CV (ADR) (NYSE:AMX) is no exception.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.