Colgate-Palmolive Company (NYSE:CL) was in 30 hedge funds’ portfolio at the end of December. CL investors should pay attention to a decrease in hedge fund sentiment recently. There were 33 hedge funds in our database with CL positions at the end of the previous quarter.
According to most market participants, hedge funds are assumed to be worthless, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the top tier of this club, about 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total asset base, and by monitoring their top picks, we have determined a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as important, positive insider trading sentiment is a second way to parse down the marketplace. Obviously, there are a number of stimuli for an executive to get rid of shares of his or her company, but just one, very simple reason why they would buy. Several empirical studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).
Consequently, it’s important to take a look at the recent action surrounding Colgate-Palmolive Company (NYSE:CL).
What does the smart money think about Colgate-Palmolive Company (NYSE:CL)?
At year’s end, a total of 30 of the hedge funds we track were bullish in this stock, a change of -9% from the third quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Lansdowne Partners, managed by Paul Ruddockáand Steve Heinz, holds the most valuable position in Colgate-Palmolive Company (NYSE:CL). Lansdowne Partners has a $359 million position in the stock, comprising 6% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $332 million position; 0% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Jean-Marie Eveillard’s First Eagle Investment Management, William von Mueffling’s Cantillon Capital Management and Bill Miller’s Legg Mason Capital Management.
Seeing as Colgate-Palmolive Company (NYSE:CL) has experienced a declination in interest from the smart money, we can see that there lies a certain “tier” of hedge funds that elected to cut their positions entirely last quarter. Interestingly, Anand Parekh’s Alyeska Investment Group dropped the largest investment of all the hedgies we key on, comprising an estimated $36 million in stock.. Bart Baum’s fund, Ionic Capital Management, also sold off its call options., about $4 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds last quarter.
What have insiders been doing with Colgate-Palmolive Company (NYSE:CL)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the last 180-day time period, Colgate-Palmolive Company (NYSE:CL) has experienced zero unique insiders purchasing, and 24 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey’s strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Colgate-Palmolive Company (NYSE:CL) is no exception.
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.