International Business Machines Corp. (NYSE:IBM) has seen a decrease in activity from the world’s largest hedge funds in recent months.
Equally as integral, bullish insider trading sentiment is a second way to parse down the world of equities. There are a number of incentives for an insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Consequently, let’s take a glance at the recent action surrounding International Business Machines Corp. (NYSE:IBM).
What does the smart money think about International Business Machines Corp. (NYSE:IBM)?
In preparation for this quarter, a total of 49 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Warren Buffett’s Berkshire Hathaway had the most valuable position in International Business Machines Corp. (NYSE:IBM), worth close to $14.5304 billion, comprising 17.1% of its total 13F portfolio. On Berkshire Hathaway’s heels is Fisher Asset Management, managed by Ken Fisher, which held a $671.8 million position; 1.8% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.
Due to the fact that International Business Machines Corp. (NYSE:IBM) has faced a declination in interest from hedge fund managers, it’s safe to say that there is a sect of money managers that decided to sell off their full holdings last quarter. It’s worth mentioning that Daniel S. Och’s OZ Management dumped the biggest investment of the “upper crust” of funds we watch, totaling about $35.1 million in stock.. Matthew Tewksbury’s fund, Stevens Capital Management, also cut its stock, about $29.7 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading International Business Machines Corp. (NYSE:IBM)?
Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past six months. Over the last half-year time frame, International Business Machines Corp. (NYSE:IBM) has experienced zero unique insiders purchasing, and 17 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to International Business Machines Corp. (NYSE:IBM). These stocks are Silicon Graphics International Corp (NASDAQ:SGI), Cray Inc. (NASDAQ:CRAY), Teradata Corporation (NYSE:TDC), and Hewlett-Packard Company (NYSE:HPQ). This group of stocks belong to the diversified computer systems industry and their market caps resemble IBM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Silicon Graphics International Corp (NASDAQ:SGI) | 15 | 1 | 5 |
| Cray Inc. (NASDAQ:CRAY) | 17 | 0 | 10 |
| Teradata Corporation (NYSE:TDC) | 25 | 0 | 4 |
| Hewlett-Packard Company (NYSE:HPQ) | 47 | 0 | 0 |
With the results shown by our tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and International Business Machines Corp. (NYSE:IBM) applies perfectly to this mantra.
