PT Telekomunikasi Indonesia (ADR) (NYSE:TLK) has experienced an increase in activity from the world's largest hedge funds lately.
To most shareholders, hedge funds are perceived as underperforming, outdated financial tools of the past. While there are greater than 8000 funds with their doors open at the moment, we hone in on the aristocrats of this club, around 450 funds. It is estimated that this group has its hands on the majority of all hedge funds' total capital, and by keeping an eye on their top investments, we have revealed a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed 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 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, positive insider trading activity is a second way to parse down the world of equities. Obviously, there are many reasons for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
Consequently, let's take a glance at the recent action surrounding PT Telekomunikasi Indonesia (ADR) (NYSE:TLK).
At year's end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 18% from the third quarter. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital had the largest position in PT Telekomunikasi Indonesia (ADR) (NYSE:TLK), worth close to $41.4 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $13.8 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Jim Simons's Renaissance Technologies, Ken Griffin's Citadel Investment Group and J. Alan Reid, Jr.'s Forward Management.
Consequently, key money managers were leading the bulls' herd. McKinley Capital Management, managed by Robert B. Gillam, assembled the most valuable position in PT Telekomunikasi Indonesia (ADR) (NYSE:TLK). McKinley Capital Management had 1 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Jacob Gottlieb's Visium Asset Management.
Insider buying is particularly usable when the company in question has experienced transactions within the past half-year. Over the latest six-month time period, PT Telekomunikasi Indonesia (ADR) (NYSE:TLK) has seen zero unique insiders purchasing, 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 PT Telekomunikasi Indonesia (ADR) (NYSE:TLK). These stocks are Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT), China Telecom Corporation Limited (ADR) (NYSE:CHA), Philippine Long Distance Telephone (ADR) (NYSE:PHI), BT Group plc (ADR) (NYSE:BT), and France Telecom SA (ADR) (NYSE:FTE). This group of stocks are in the telecom services - foreign industry and their market caps match TLK's market cap.