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Is Vodafone Group Plc (ADR) (VOD) Going to Burn These Hedge Funds?

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.



Vodafone Group Plc (ADR) (NASDAQ:VOD) was in 27 hedge funds’ portfolios at the end of September. VOD investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. There were 34 hedge funds in our database with VOD holdings at the end of the previous quarter. At the end of this article we will also compare VOD to other stocks including GlaxoSmithKline plc (ADR) (NYSE:GSK), NIKE, Inc. (NYSE:NKE), and Lloyds Banking Group PLC (ADR) (NYSE:LYG) to get a better sense of its popularity.

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In today’s marketplace there are dozens of signals shareholders use to analyze stocks. A duo of the less utilized signals are hedge fund and insider trading interest. Hedge fund experts at Insider Monkey have shown that, historically, those who follow the best picks of the elite money managers can outperform the broader indices by a significant amount (see the details here).

Now, let’s go over the new action encompassing Vodafone Group Plc (ADR) (NASDAQ:VOD).

How have hedgies been trading Vodafone Group Plc (ADR) (NASDAQ:VOD)?

Heading into Q4, a total of 27 of the hedge funds tracked by Insider Monkey were long in this stock, a 21% drop from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.

Of the funds tracked by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the largest position in Vodafone Group Plc (ADR) (NASDAQ:VOD), worth close to $242.2 million, accounting for 1.1% of its total 13F portfolio. The second-most bullish hedge fund manager is Jonathon Jacobson of Highfields Capital Management, with a $119.6 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Nick Niell’s Arrowgrass Capital Partners, D. E. Shaw’s D E Shaw, and Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC.

Due to the fact that Vodafone Group Plc (ADR) (NASDAQ:VOD) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of money managers that elected to cut their entire stakes last quarter. It’s worth mentioning that Eric Mindich’s Eton Park Capital dropped the biggest investment of the 700 funds followed by Insider Monkey, worth about $36.3 million in stock. James Dinan’s fund, York Capital Management, also said goodbye to its stock, about $16.4 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by seven funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Vodafone Group Plc (ADR) (NASDAQ:VOD). These stocks are GlaxoSmithKline plc (ADR) (NYSE:GSK), NIKE, Inc. (NYSE:NKE), Lloyds Banking Group PLC (ADR) (NYSE:LYG), and BHP Billiton plc (ADR) (NYSE:BBL). This group of stocks’ market values resemble VOD’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GSK 35 1019596 2
NKE 59 4490275 2
LYG 8 402535 -5
BBL 4 82863 -2

As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.50 billion, while in Vodafone investors held about half of that, $744 million worth of shares. NIKE, Inc. (NYSE:NKE) is the most popular stock in this table. On the other hand BHP Billiton plc (ADR) (NYSE:BBL) is the least popular, with only four bullish hedge fund positions. Vodafone Group Plc (ADR) (NASDAQ:VOD) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NKE might be a better candidate to consider a long position.

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