Is Shaw Communications Inc (USA) (NYSE:SJR) a good investment now? Prominent investors are reducing their bets on the stock. The number of long hedge fund bets fell by 1 recently.
According to most traders, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are over 8000 funds in operation at the moment, we at Insider Monkey look at the top tier of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total asset base, and by watching their highest performing picks, we have deciphered a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as integral, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a variety of motivations for an insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).
Consequently, we’re going to take a peek at the recent action surrounding Shaw Communications Inc (USA) (NYSE:SJR).
How are hedge funds trading Shaw Communications Inc (USA) (NYSE:SJR)?
Heading into 2013, a total of 5 of the hedge funds we track were long in this stock, a change of -17% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly.
Of the funds we track, Daniel Bubis’s Tetrem Capital Management had the largest position in Shaw Communications Inc (USA) (NYSE:SJR), worth close to $37 million, accounting for 1.1% of its total 13F portfolio. Sitting at the No. 2 spot is Joel Greenblatt of Gotham Asset Management, with a $1 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include D. E. Shaw’s D E Shaw, J. Alan Reid, Jr.’s Forward Management and Jim Simons’s Renaissance Technologies.
Due to the fact that Shaw Communications Inc (USA) (NYSE:SJR) has experienced a declination in interest from the smart money, we can see that there is a sect of hedge funds who were dropping their positions entirely at the end of the year. It’s worth mentioning that Carl Tiedemann and Michael Tiedemann’s TIG Advisors sold off the largest investment of the 450+ funds we watch, comprising close to $6 million in stock., and John Thiessen of Vertex One Asset Management was right behind this move, as the fund dumped about $0 million worth. These moves are important to note, as aggregate hedge fund interest fell by 1 funds at the end of the year.
How are insiders trading Shaw Communications Inc (USA) (NYSE:SJR)?
Insider buying is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time frame, Shaw Communications Inc (USA) (NYSE:SJR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Shaw Communications Inc (USA) (NYSE:SJR). These stocks are Discovery Communications Inc. (NASDAQ:DISCA), Liberty Global Inc. (NASDAQ:LBTYA), DISH Network Corp. (NASDAQ:DISH), Virgin Media Inc. (NASDAQ:VMED), and Charter Communications, Inc. (NASDAQ:CHTR). All of these stocks are in the catv systems industry and their market caps resemble SJR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Discovery Communications Inc. (NASDAQ:DISCA)||15||1||5|
|Liberty Global Inc. (NASDAQ:LBTYA)||44||0||0|
|DISH Network Corp. (NASDAQ:DISH)||34||0||11|
|Virgin Media Inc. (NASDAQ:VMED)||31||0||2|
|Charter Communications, Inc. (NASDAQ:CHTR)||37||2||7|
With the returns exhibited by our tactics, retail investors must always pay attention to hedge fund and insider trading activity, and Shaw Communications Inc (USA) (NYSE:SJR) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.