In today’s marketplace, there are plenty of indicators investors can use to monitor their holdings. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can trounce the S&P 500 by a significant margin (see just how much).
Equally as key, bullish insider trading activity is another way to break down the investments you’re interested in. Obviously, there are a number of reasons for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).
With these “truths” under our belt, we’re going to take a peek at the recent action surrounding Sprint Nextel Corporation (NYSE:S).
How have hedgies been trading Sprint Nextel Corporation (NYSE:S)?
Heading into Q2, a total of 51 of the hedge funds we track were long in this stock, a change of -7% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Paulson & Co, managed by John Paulson, holds the largest position in Sprint Nextel Corporation (NYSE:S). Paulson & Co has a $1.4355 billion position in the stock, comprising 8.1% of its 13F portfolio. Sitting at the No. 2 spot is Leon Cooperman of Omega Advisors, with a $405.1 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Matthew Halbower’s Pentwater Capital Management, Michael A. Price and Amos Meron’s Empyrean Capital Partners and David Einhorn’s Greenlight Capital.
Because Sprint Nextel Corporation (NYSE:S) has experienced declining sentiment from hedge fund managers, we can see that there was a specific group of fund managers who were dropping their entire stakes last quarter. Intriguingly, Robert Boucai’s Newbrook Capital Advisors said goodbye to the largest investment of the 450+ funds we watch, valued at about $75.2 million in stock., and Bruce Kovner of Caxton Associates LP was right behind this move, as the fund dumped about $57.4 million worth. These moves are interesting, as aggregate hedge fund interest fell by 4 funds last quarter.
What do corporate executives and insiders think about Sprint Nextel Corporation (NYSE:S)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Sprint Nextel Corporation (NYSE:S) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Sprint Nextel Corporation (NYSE:S). These stocks are Rogers Communications Inc. (USA) (NYSE:RCI), Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), VimpelCom Ltd (ADR) (NYSE:VIP), TELUS Corporation (USA) (NYSE:TU), and Mobile TeleSystems OJSC (ADR) (NYSE:MBT). All of these stocks are in the wireless communications industry and their market caps are similar to S’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Rogers Communications Inc. (USA) (NYSE:RCI) | 10 | 0 | 0 |
| Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC) | 7 | 0 | 0 |
| VimpelCom Ltd (ADR) (NYSE:VIP) | 9 | 0 | 0 |
| TELUS Corporation (USA) (NYSE:TU) | 7 | 0 | 0 |
| Mobile TeleSystems OJSC (ADR) (NYSE:MBT) | 15 | 0 | 0 |
With the results exhibited by our studies, retail investors must always watch hedge fund and insider trading sentiment, and Sprint Nextel Corporation (NYSE:S) applies perfectly to this mantra.
