In the eyes of many of your fellow readers, hedge funds are perceived as delayed, old financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open currently, this site aim at the leaders of this group, close to 525 funds. It is assumed that this group has its hands on the lion's share of all hedge funds' total assets, and by paying attention to their best equity investments, we've unsheathed a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as useful, positive insider trading activity is a second way to analyze the financial markets. Just as you'd expect, there are a number of motivations for a corporate insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
Now that that's out of the way, let's examine the recent info surrounding International Flavors & Fragrances Inc (NYSE:IFF).
At Q2's end, a total of 17 of the hedge funds we track were long in this stock, a change of -6% from the previous quarter. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.
When using filings from the hedgies we track, Mario Gabelli's GAMCO Investors had the most valuable position in International Flavors & Fragrances Inc (NYSE:IFF), worth close to $70.5 million, comprising 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which held a $29.4 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Natixis Global Asset Management's Harris Associates, David Harding's Winton Capital Management and Chuck Royce's Royce & Associates.
Judging by the fact that International Flavors & Fragrances Inc (NYSE:IFF) has faced dropping sentiment from upper-tier hedge fund managers, it's easy to see that there were a few fund managers that elected to cut their positions entirely heading into Q2. At the top of the heap, Phill Gross and Robert Atchinson's Adage Capital Management sold off the largest position of all the hedgies we monitor, valued at about $6.9 million in stock, and Glenn Russell Dubin of Highbridge Capital Management was right behind this move, as the fund said goodbye to about $3.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds heading into Q2.
Bullish insider trading is particularly usable when the company in focus has seen transactions within the past six months. Over the latest 180-day time frame, International Flavors & Fragrances Inc (NYSE:IFF) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to International Flavors & Fragrances Inc (NYSE:IFF). These stocks are Rockwood Holdings, Inc. (NYSE:ROC), The Valspar Corporation (NYSE:VAL), Albemarle Corporation (NYSE:ALB), W.R. Grace & Co. (NYSE:GRA), and Westlake Chemical Corporation (NYSE:WLK). All of these stocks are in the specialty chemicals industry and their market caps are closest to IFF's market cap.