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Newell Rubbermaid Inc. (NYSE:NWL): Hedge Funds and Insiders Are Bearish, What Should You Do?

Newell Rubbermaid Inc. (NYSE:NWL) was in 28 hedge funds’ portfolio at the end of December. NWL investors should pay attention to a decrease in hedge fund interest of late. There were 28 hedge funds in our database with NWL holdings at the end of the previous quarter.

According to most traders, hedge funds are viewed as underperforming, old financial tools of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey hone in on the bigwigs of this club, close to 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by paying attention to their highest performing stock picks, we have found a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Newell Rubbermaid Inc. (NYSE:NWL)

Just as beneficial, optimistic insider trading sentiment is another way to break down the stock market universe. As the old adage goes: there are plenty of stimuli for an insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this method if piggybackers know what to do (learn more here).

Now, it’s important to take a peek at the recent action surrounding Newell Rubbermaid Inc. (NYSE:NWL).

How are hedge funds trading Newell Rubbermaid Inc. (NYSE:NWL)?

At the end of the fourth quarter, a total of 28 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the biggest position in Newell Rubbermaid Inc. (NYSE:NWL), worth close to $115 million billion, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is John W. Rogers of Ariel Investments, with a $87 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Patrick Degorce’s Theleme Partners, Doug Silverman’s Senator Investment Group and Phill Gross and Robert Atchinson’s Adage Capital Management.

Seeing as Newell Rubbermaid Inc. (NYSE:NWL) has experienced a declination in interest from hedge fund managers, logic holds that there is a sect of funds that elected to cut their entire stakes heading into 2013. Interestingly, Dan Loeb’s Third Point cut the biggest position of all the hedgies we monitor, worth about $48 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $8 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Newell Rubbermaid Inc. (NYSE:NWL)

Insider purchases made by high-level executives is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last half-year time period, Newell Rubbermaid Inc. (NYSE:NWL) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

With the results shown by Insider Monkey’s research, retail investors must always watch hedge fund and insider trading sentiment, and Newell Rubbermaid Inc. (NYSE:NWL) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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