LATAM Airlines Group SA (ADR) (LFL): Insiders Aren’t Crazy About It

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LATAM Airlines Group SA (ADR) (NYSE:LFL) was in 6 hedge funds’ portfolio at the end of December. LFL has seen an increase in hedge fund sentiment in recent months. There were 4 hedge funds in our database with LFL positions at the end of the previous quarter.

If you’d ask most shareholders, hedge funds are assumed to be unimportant, old financial tools of years past. While there are more than 8000 funds trading today, we at Insider Monkey look at the top tier of this group, about 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total capital, and by paying attention to their best investments, we have found a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as key, optimistic insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are a variety of reasons for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this strategy if shareholders understand where to look (learn more here).

Keeping this in mind, it’s important to take a gander at the key action surrounding LATAM Airlines Group SA (ADR) (NYSE:LFL).

How are hedge funds trading LATAM Airlines Group SA (ADR) (NYSE:LFL)?

In preparation for this year, a total of 6 of the hedge funds we track were bullish in this stock, a change of 50% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.

LATAM Airlines Group SA (ADR) (NYSE:LFL)According to our comprehensive database, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in LATAM Airlines Group SA (ADR) (NYSE:LFL). Citadel Investment Group has a $5.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is D E Shaw, managed by D. E. Shaw, which held a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Mike Vranos’s Ellington and Israel Englander’s Millennium Management.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in LATAM Airlines Group SA (ADR) (NYSE:LFL). Citadel Investment Group had 5.5 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $1.5 million position during the quarter. The following funds were also among the new LFL investors: Jim Simons’s Renaissance Technologies, Mike Vranos’s Ellington, and Israel Englander’s Millennium Management.

Insider trading activity in LATAM Airlines Group SA (ADR) (NYSE:LFL)

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time frame, LATAM Airlines Group SA (ADR) (NYSE:LFL) has experienced zero unique insiders buying, 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 LATAM Airlines Group SA (ADR) (NYSE:LFL). These stocks are JetBlue Airways Corporation (NASDAQ:JBLU), Alaska Air Group, Inc. (NYSE:ALK), Copa Holdings, S.A. (NYSE:CPA), Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), and Southwest Airlines Co. (NYSE:LUV). This group of stocks are the members of the regional airlines industry and their market caps match LFL’s market cap.

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