ARM Holdings plc (ADR) (NASDAQ:ARMH) was in 16 hedge funds' portfolio at the end of December. ARMH investors should pay attention to an increase in enthusiasm from smart money in recent months. There were 15 hedge funds in our database with ARMH positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are tons of metrics shareholders can use to watch Mr. Market. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can beat their index-focused peers by a solid margin (see just how much).
Equally as key, optimistic insider trading sentiment is another way to parse down the stock market universe. Just as you'd expect, there are lots of motivations for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this method if investors understand where to look (learn more here).
With these "truths" under our belt, it's important to take a glance at the latest action regarding ARM Holdings plc (ADR) (NASDAQ:ARMH).
In preparation for this year, a total of 16 of the hedge funds we track were long in this stock, a change of 7% from the third quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital had the biggest position in ARM Holdings plc (ADR) (NASDAQ:ARMH), worth close to $37 million, comprising 0.2% of its total 13F portfolio. On Arrowstreet Capital's heels is Paul Reeder and Edward Shapiro of PAR Capital Management, with a $32 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Donald Chiboucis's Columbus Circle Investors, Andrew Sandler's Sandler Capital Management and John Thaler's JAT Capital Management.
As aggregate interest increased, key hedge funds were leading the bulls' herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in ARM Holdings plc (ADR) (NASDAQ:ARMH). Arrowstreet Capital had 37 million invested in the company at the end of the quarter. Donald Chiboucis's Columbus Circle Investors also made a $24 million investment in the stock during the quarter. The other funds with brand new ARMH positions are John Thaler's JAT Capital Management, Ken Griffin's Citadel Investment Group, and Sean Cullinan's Point State Capital.
Bullish insider trading is best served when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, ARM Holdings plc (ADR) (NASDAQ:ARMH) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results demonstrated by our studies, everyday investors should always watch hedge fund and insider trading sentiment, and ARM Holdings plc (ADR) (NASDAQ:ARMH) is an important part of this process.
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