Autoliv Inc. (NYSE:ALV) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. ALV has experienced a decrease in enthusiasm from smart money in recent months. There were 13 hedge funds in our database with ALV positions at the end of the previous quarter.
To most market participants, hedge funds are viewed as slow, old financial tools of years past. While there are greater than 8000 funds in operation today, we choose to focus on the leaders of this club, around 450 funds. It is estimated that this group controls most of all hedge funds’ total capital, and by tracking their best investments, we have uncovered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 24 percentage points in 7 months (see all of our picks from August).
Equally as beneficial, bullish insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are lots of incentives for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this strategy if piggybackers know where to look (learn more here).
Now, let’s take a glance at the key action surrounding Autoliv Inc. (NYSE:ALV).
What have hedge funds been doing with Autoliv Inc. (NYSE:ALV)?
At year’s end, a total of 10 of the hedge funds we track held long positions in this stock, a change of -23% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Autoliv Inc. (NYSE:ALV). AQR Capital Management has a $19 million position in the stock, comprising 0.1% of its 13F portfolio. On AQR Capital Management’s heels is Legg Mason Capital Management, managed by Bill Miller, which held a $12 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Chuck Royce’s Royce & Associates, Michael Larson’s Bill & Melinda Gates Foundation Trust and David Keidan’s Buckingham Capital Management.
Judging by the fact that Autoliv Inc. (NYSE:ALV) has witnessed declining sentiment from the smart money, logic holds that there was a specific group of funds that elected to cut their entire stakes last quarter. At the top of the heap, John Armitage’s Egerton Capital Limited sold off the largest position of all the hedgies we track, valued at close to $30 million in stock.. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also dropped its stock, about $6 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 3 funds last quarter.
What have insiders been doing with Autoliv Inc. (NYSE:ALV)?
Bullish insider trading is best served when the company in question has seen transactions within the past 180 days. Over the latest six-month time frame, Autoliv Inc. (NYSE:ALV) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Autoliv Inc. (NYSE:ALV). These stocks are Allison Transmission Holdings Inc (NYSE:ALSN), BorgWarner Inc. (NYSE:BWA), Lear Corporation (NYSE:LEA), LKQ Corporation (NASDAQ:LKQ), and TRW Automotive Holdings Corp. (NYSE:TRW). This group of stocks are in the auto parts industry and their market caps match ALV’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Allison Transmission Holdings Inc (NYSE:ALSN) | 7 | 0 | 10 |
| BorgWarner Inc. (NYSE:BWA) | 16 | 0 | 6 |
| Lear Corporation (NYSE:LEA) | 37 | 0 | 6 |
| LKQ Corporation (NASDAQ:LKQ) | 14 | 1 | 7 |
| TRW Automotive Holdings Corp. (NYSE:TRW) | 23 | 0 | 8 |
With the results exhibited by our strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Autoliv Inc. (NYSE:ALV) is an important part of this process.
