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Hedge Funds Are Crazy About DIRECTV (NASDAQ:DTV)

DIRECTV (DTV)DIRECTV (NASDAQ:DTV) was in 44 hedge funds’ portfolio at the end of the fourth quarter of 2012. DTV investors should pay attention to an increase in activity from the world’s largest hedge funds lately. There were 43 hedge funds in our database with DTV holdings at the end of the previous quarter.

According to most stock holders, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are over 8000 funds trading at the moment, we look at the moguls of this group, around 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds’ total capital, and by monitoring their top picks, we have identified a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as beneficial, positive insider trading activity is a second way to parse down the stock market universe. There are many incentives for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).

With all of this in mind, it’s important to take a peek at the key action regarding DIRECTV (NASDAQ:DTV).

What does the smart money think about DIRECTV (NASDAQ:DTV)?

At the end of the fourth quarter, a total of 44 of the hedge funds we track were bullish in this stock, a change of 2% 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 boosting their stakes substantially.

According to our comprehensive database, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in DIRECTV (NASDAQ:DTV). Berkshire Hathaway has a $1.707 billion position in the stock, comprising 2.3% of its 13F portfolio. The second largest stake is held by Southeastern Asset Management, managed by Mason Hawkins, which held a $1.294 position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Jonathon Jacobson’s Highfields Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Mario Gabelli’s GAMCO Investors.

Consequently, some big names were leading the bulls’ herd. Senator Investment Group, managed by Doug Silverman, assembled the most outsized call position in DIRECTV (NASDAQ:DTV). Senator Investment Group had 25 million invested in the company at the end of the quarter. Abby Flamholz and Yehuda Blinder’s ADAR Investment Management also initiated a $6 million position during the quarter. The following funds were also among the new DTV investors: Glenn Russell Dubin’s Highbridge Capital Management, Geoffrey Raynor’s Q Investments (Specter Holdings), and Paul Tudor Jones’s Tudor Investment Corp.

What do corporate executives and insiders think about DIRECTV (NASDAQ:DTV)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time period, DIRECTV (NASDAQ:DTV) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

With the returns exhibited by Insider Monkey’s strategies, retail investors must always monitor hedge fund and insider trading sentiment, and DIRECTV (NASDAQ:DTV) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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