Toll Brothers Inc (NYSE:TOL) investors should pay attention to a decrease in hedge fund sentiment lately.
In the financial world, there are many methods market participants can use to track Mr. Market. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a superb amount (see just how much).
Just as important, positive insider trading activity is a second way to parse down the stock market universe. There are plenty of motivations for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
Keeping this in mind, we're going to take a gander at the latest action surrounding Toll Brothers Inc (NYSE:TOL).
In preparation for this year, a total of 26 of the hedge funds we track were long in this stock, a change of -7% from the third quarter. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Toll Brothers Inc (NYSE:TOL). Renaissance Technologies has a $44 million billion position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which held a $41 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Donald Chiboucis's Columbus Circle Investors, Ken Heebner's Capital Growth Management and Steven Cohen's SAC Capital Advisors.
Seeing as Toll Brothers Inc (NYSE:TOL) has faced a declination in interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies who sold off their positions entirely at the end of the year. At the top of the heap, Louis Navellier's Navellier & Associates dumped the biggest position of the "upper crust" of funds we key on, worth about $46 million in stock.. Stanley Druckenmiller's fund, Duquesne Capital, also cut its stock, about $29 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds at the end of the year.
Insider buying is most useful when the company we're looking at has seen transactions within the past six months. Over the latest 180-day time period, Toll Brothers Inc (NYSE:TOL) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
With the results exhibited by our research, everyday investors must always watch hedge fund and insider trading activity, and Toll Brothers Inc (NYSE:TOL) is no exception.
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