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Coca-Cola Enterprises Inc (NYSE:CCE): Insiders Are Dumping, Should You?

Coca-Cola Enterprises Inc (NYSE:CCE) was in 27 hedge funds’ portfolio at the end of December. CCE investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 24 hedge funds in our database with CCE positions at the end of the previous quarter.

According to most traders, hedge funds are assumed to be slow, outdated investment vehicles of years past. While there are over 8000 funds in operation at the moment, we hone in on the bigwigs of this group, close to 450 funds. It is widely believed that this group oversees the majority of all hedge funds’ total asset base, and by watching their highest performing stock picks, we have unearthed a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Barry Rosenstein JANA PARTNERSEqually as important, optimistic insider trading activity is a second way to break down the marketplace. Just as you’d expect, there are a number of stimuli for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if “monkeys” know what to do (learn more here).

Now, it’s important to take a look at the latest action surrounding Coca-Cola Enterprises Inc (NYSE:CCE).

How are hedge funds trading Coca-Cola Enterprises Inc (NYSE:CCE)?

At the end of the fourth quarter, a total of 27 of the hedge funds we track were long in this stock, a change of 13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings significantly.

Of the funds we track, James Crichton and Adam Weiss’s Scout Capital Management had the biggest position in Coca-Cola Enterprises Inc (NYSE:CCE), worth close to $191 million, accounting for 3.3% of its total 13F portfolio. Sitting at the No. 2 spot is JANA Partners, managed by Barry Rosenstein, which held a $166 million position; the fund has 4.7% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Daniel S. Och’s OZ Management and Dan Loeb’s Third Point.

As aggregate interest increased, some big names were leading the bulls’ herd. OZ Management, managed by Daniel S. Och, initiated the most valuable position in Coca-Cola Enterprises Inc (NYSE:CCE). OZ Management had 102 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also made a $51 million investment in the stock during the quarter. The other funds with new positions in the stock are Keith Meister’s Corvex Capital, Frank Brosens’s Taconic Capital, and D. E. Shaw’s D E Shaw.

What have insiders been doing with Coca-Cola Enterprises Inc (NYSE:CCE)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Coca-Cola Enterprises Inc (NYSE:CCE) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned studies, retail investors must always keep an eye on hedge fund and insider trading activity, and Coca-Cola Enterprises Inc (NYSE:CCE) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.

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