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HDFC Bank Limited (ADR) (HDB): Insiders Aren’t Crazy About It

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HDFC Bank Limited (ADR) (NYSE:HDB) shareholders have witnessed an increase in support from the world’s most elite money managers of late.

According to most stock holders, hedge funds are perceived as worthless, outdated investment tools of the past. While there are more than 8000 funds in operation at present, we hone in on the masters of this club, close to 450 funds. It is widely believed that this group has its hands on most of the hedge fund industry’s total asset base, and by paying attention to their best stock picks, we have determined a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped 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 23.3 percentage points in 8 months (explore the details and some picks here).


Just as beneficial, positive insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are a number of motivations for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know where to look (learn more here).

Keeping this in mind, we’re going to take a look at the latest action regarding HDFC Bank Limited (ADR) (NYSE:HDB).

What have hedge funds been doing with HDFC Bank Limited (ADR) (NYSE:HDB)?

At the end of the first quarter, a total of 20 of the hedge funds we track were bullish in this stock, a change of 5% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in HDFC Bank Limited (ADR) (NYSE:HDB). Fisher Asset Management has a $126.3 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $45.7 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Cliff Asness’s AQR Capital Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

As industrywide interest jumped, some big names were leading the bulls’ herd. Generation Investment Management, managed by David Blood and Al Gore, created the most outsized position in HDFC Bank Limited (ADR) (NYSE:HDB). Generation Investment Management had 3.7 million invested in the company at the end of the quarter. Manish Chopra’s Tiger Veda also initiated a $2.7 million position during the quarter. The other funds with new positions in the stock are Ken Gray and Steve Walsh’s Bryn Mawr Capital and Bart Baum’s Ionic Capital Management.

How have insiders been trading HDFC Bank Limited (ADR) (NYSE:HDB)?

Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, HDFC Bank Limited (ADR) (NYSE:HDB) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to HDFC Bank Limited (ADR) (NYSE:HDB). These stocks are Popular Inc (NASDAQ:BPOP), Woori Finance Holdings Co., Ltd. (ADR) (NYSE:WF), Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX), CorpBanca (ADR) (NYSE:BCA), and Bank of Ireland (ADR) (NYSE:IRE). All of these stocks are in the foreign regional banks industry and their market caps are similar to HDB’s market cap.

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