While some manufacturing-focused investors prefer to play auto parts manufacturers, foreign automakers, or even EV upstarts like Tesla, General Motors Company (NYSE:GM)'s performance in 2013 has been proving that it too can maintain a bull's capital. What's more, one specific group of investors has been particularly bullish on the company of late; let's take a look.
If you were to ask many traders, hedge funds are viewed as delayed, old financial vehicles of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey aim at the top tier of this club, close to 525 funds. Analysts calculate that this group oversees the majority of the hedge fund industry's total assets, and by tracking their highest performing equity investments, we've formulated a number of investment strategies that have historically outperformed 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 started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as useful, bullish insider trading sentiment is a second way to analyze the marketplace. Obviously, there are lots of motivations for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).
Now that that's out of the way, we're going to study the recent info surrounding General Motors Company (NYSE:GM).
At the end of the second quarter, a total of 122 of the hedge funds we track were bullish in this stock, a change of 11% from the first quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings substantially.
According to our 13F database, Harris Associates, managed by Natixis Global Asset Management, holds the most valuable position in General Motors Company (NYSE:GM). Harris Associates has a $1.7291 billion position in the stock, comprising 3.6% of its 13F portfolio. Sitting at the No. 2 spot is Warren Buffett of Berkshire Hathaway, with a $1.3324 billion position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include David Einhorn's Greenlight Capital, William B. Gray's Orbis Investment Management and Frank Brosens's Taconic Capital.
As one would understandably expect, certain bigger names were breaking ground themselves. Berkshire Hathaway, managed by Warren Buffett, established the biggest position in General Motors Company (NYSE:GM). Berkshire Hathaway had 1.3324 billion invested in the company at the end of the quarter. David Einhorn's Greenlight Capital also made a $567.8 million investment in the stock during the quarter. The following funds were also among the new GM investors: William B. Gray's Orbis Investment Management, Frank Brosens's Taconic Capital, and Larry Robbins's Glenview Capital.
Insider buying made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, General Motors Company (NYSE:GM) has seen 2 unique insiders buying, and 6 insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to General Motors Company (NYSE:GM). These stocks are Toyota Motor Corporation (ADR) (NYSE:TM), Tata Motors Limited (ADR) (NYSE:TTM), Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), and Nissan Motor Co., Ltd. (ADR) (PINK:NSANY). All of these stocks are in the auto manufacturers - major industry and their market caps are closest to GM's market cap.