At the moment, there are dozens of methods shareholders can use to track Mr. Market. A duo of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can beat their index-focused peers by a superb margin (see just how much).
Just as important, bullish insider trading activity is a second way to break down the investments you’re interested in. Obviously, there are plenty of incentives for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if investors understand where to look (learn more here).
Now, it’s important to take a gander at the recent action surrounding E-House (China) Holdings Limited (ADR) (NYSE:EJ).
Hedge fund activity in E-House (China) Holdings Limited (ADR) (NYSE:EJ)
In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly.
Of the funds we track, Orbis Investment Management, managed by William B. Gray, holds the largest position in E-House (China) Holdings Limited (ADR) (NYSE:EJ). Orbis Investment Management has a $70.7 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is Platinum Asset Management, managed by Kerr Neilson, which held a $25.3 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
Since E-House (China) Holdings Limited (ADR) (NYSE:EJ) has experienced bearish interest from the smart money, logic holds that there is a sect of money managers that slashed their positions entirely at the end of the year. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of the 450+ funds we monitor, valued at about $0.2 million in stock. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading E-House (China) Holdings Limited (ADR) (NYSE:EJ)?
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, E-House (China) Holdings Limited (ADR) (NYSE:EJ) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to E-House (China) Holdings Limited (ADR) (NYSE:EJ). These stocks are Agree Realty Corporation (NYSE:ADC), Homex Development Corp. (ADR) (NYSE:HXM), Tejon Ranch Company (NYSE:TRC), and Campus Crest Communities Inc (NYSE:CCG). This group of stocks are in the property management industry and their market caps are similar to EJ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Agree Realty Corporation (NYSE:ADC) | 5 | 1 | 0 |
| Homex Development Corp. (ADR) (NYSE:HXM) | 7 | 0 | 0 |
| Tejon Ranch Company (NYSE:TRC) | 8 | 1 | 1 |
| Campus Crest Communities Inc (NYSE:CCG) | 8 | 1 | 0 |
With the results exhibited by our studies, everyday investors should always watch hedge fund and insider trading sentiment, and E-House (China) Holdings Limited (ADR) (NYSE:EJ) applies perfectly to this mantra.
