BHP Billiton Limited (ADR) (NYSE:BHP) is a big part of many investors' portfolios. Should it be?
If you were to ask many traders, hedge funds are perceived as bloated, old financial tools of an era lost to time. Although there are In excess of 8,000 hedge funds trading today, this site aim at the elite of this club, around 525 funds. It is widely held that this group oversees the lion's share of all hedge funds' total capital, and by watching their best equity investments, we've brought to light a number of investment strategies that have historically beaten the market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as key, positive insider trading sentiment is another way to look at the stock market universe. Just as you'd expect, there are lots of reasons for an insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).
Thus, it's important to discuss the latest info for BHP Billiton Limited (ADR) (NYSE:BHP).
Heading into Q3, a total of 22 of the hedge funds we track held long positions in this stock, a change of 22% from the previous quarter. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
Out of the hedge funds we follow, Ken Fisher's Fisher Asset Management had the largest position in BHP Billiton Limited (ADR) (NYSE:BHP), worth close to $387.1 million, accounting for 1% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $25.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Ray Dalio's Bridgewater Associates.
With a general bullishness amongst the titans, certain bigger names were breaking ground themselves. Fisher Asset Management, managed by Ken Fisher, created the biggest position in BHP Billiton Limited (ADR) (NYSE:BHP). Fisher Asset Management had 387.1 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also initiated a $25.4 million position during the quarter. The following funds were also among the new BHP investors: D. E. Shaw's D E Shaw, Israel Englander's Millennium Management, and Ray Dalio's Bridgewater Associates.
Insider buying is particularly usable when the company in focus has seen transactions within the past six months. Over the latest half-year time frame, BHP Billiton Limited (ADR) (NYSE:BHP) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to BHP Billiton Limited (ADR) (NYSE:BHP). These stocks are Cameco Corporation (USA) (NYSE:CCJ), Teck Resources Ltd (USA) (NYSE:TCK), Rio Tinto plc (ADR) (NYSE:RIO), Vale SA (ADR) (NYSE:VALE), and BHP Billiton plc (ADR) (NYSE:BBL). All of these stocks are in the industrial metals & minerals industry and their market caps are closest to BHP's market cap.