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Here is What Hedge Funds Think About Itau Unibanco Holding SA (ADR) (ITUB)

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Itau Unibanco Holding SA (ADR) (NYSE:ITUB) was in 19 hedge funds’ portfolio at the end of March. ITUB investors should be aware of a decrease in enthusiasm from smart money recently. There were 25 hedge funds in our database with ITUB holdings at the end of the previous quarter.

Itau Unibanco Holding SA (ADR) (NYSE:ITUB)

In the eyes of most stock holders, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we hone in on the masters of this club, around 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by tracking their best picks, we have revealed a number of investment strategies that have historically beaten Mr. 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 began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as integral, positive insider trading sentiment is another way to break down the investments you’re interested in. There are a number of incentives for an executive to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

With all of this in mind, let’s take a peek at the latest action encompassing Itau Unibanco Holding SA (ADR) (NYSE:ITUB).

What have hedge funds been doing with Itau Unibanco Holding SA (ADR) (NYSE:ITUB)?

At the end of the first quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of -24% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Charles de Vaulx’s International Value Advisers had the largest position in Itau Unibanco Holding SA (ADR) (NYSE:ITUB), worth close to $68.3 million, accounting for 1.6% of its total 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $24.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Richard Driehaus’s Driehaus Capital, Cliff Asness’s AQR Capital Management and Clint Carlson’s Carlson Capital.

Since Itau Unibanco Holding SA (ADR) (NYSE:ITUB) has faced a declination in interest from the smart money, it’s safe to say that there were a few money managers who sold off their full holdings in Q1. Interestingly, D. E. Shaw’s D E Shaw dumped the biggest stake of all the hedgies we watch, totaling an estimated $33.9 million in stock.. Stanley Druckenmiller’s fund, Duquesne Capital, also dropped its stock, about $26.2 million worth. These transactions are important to note, as total hedge fund interest dropped by 6 funds in Q1.

How have insiders been trading Itau Unibanco Holding SA (ADR) (NYSE:ITUB)?

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 latest six-month time frame, Itau Unibanco Holding SA (ADR) (NYSE:ITUB) 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 Itau Unibanco Holding SA (ADR) (NYSE:ITUB). These stocks are Lloyds Banking Group PLC (ADR) (NYSE:LYG), Barclays PLC (ADR) (NYSE:BCS), UBS AG (USA) (NYSE:UBS), and Banco Santander, S.A. (ADR) (NYSE:SAN). This group of stocks are the members of the foreign money center banks industry and their market caps resemble ITUB’s market cap.

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