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Do Hedge Funds and Insiders Love Wyndham Worldwide Corporation (NYSE:WYN)?

Wyndham Worldwide Corporation (NYSE:WYN) investors should be aware of a decrease in enthusiasm from smart money in recent months.

Wyndham Worldwide Corporation

To most traders, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at present, we choose to focus on the masters of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total capital, and by tracking their best stock picks, we have formulated a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as key, positive insider trading sentiment is a second way to parse down the financial markets. Obviously, there are many incentives for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if investors know what to do (learn more here).

With all of this in mind, we’re going to take a peek at the latest action encompassing Wyndham Worldwide Corporation (NYSE:WYN).

How have hedgies been trading Wyndham Worldwide Corporation (NYSE:WYN)?

Heading into 2013, a total of 30 of the hedge funds we track were long in this stock, a change of -9% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.

Of the funds we track, Stephen Mandel’s Lone Pine Capital had the biggest position in Wyndham Worldwide Corporation (NYSE:WYN), worth close to $316 million, accounting for 2% of its total 13F portfolio. Coming in second is Iridian Asset Management, managed by David Cohen and Harold Levy, which held a $274 million position; 1.3% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Dinakar Singh’s TPG-AXON Management LP, Christopher MedlockáJames’s Partner Fund Management and Jean-Marie Eveillard’s First Eagle Investment Management.

Due to the fact that Wyndham Worldwide Corporation (NYSE:WYN) has experienced declining sentiment from hedge fund managers, logic holds that there lies a certain “tier” of funds who were dropping their positions entirely heading into 2013. At the top of the heap, Louis Navellier’s Navellier & Associates cut the largest stake of the 450+ funds we watch, valued at about $53 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund dumped about $23 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds heading into 2013.

How have insiders been trading Wyndham Worldwide Corporation (NYSE:WYN)?

Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, Wyndham Worldwide Corporation (NYSE:WYN) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Wyndham Worldwide Corporation (NYSE:WYN) is no exception.

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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