Is Seagate Technology PLC (NASDAQ:STX) a sell?
Now, according to many of your fellow readers, hedge funds are seen as useless, old investment tools of a period lost to current times. Although there are more than 8,000 hedge funds trading today, this site focuses on the masters of this group, about 525 funds. It is assumed that this group has its hands on most of the hedge fund industry's total capital, and by watching their best equity investments, we've discovered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as necessary, positive insider trading activity is another way to look at the financial markets. Just as you'd expect, there are a number of motivations for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).
What's more, it's important to discuss the recent info for Seagate Technology PLC (NASDAQ:STX).
At Q2's end, a total of 24 of the hedge funds we track were long in this stock, a change of -17% from one quarter earlier. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were upping their holdings substantially.
Out of the hedge funds we follow, AQR Capital Management, managed by Cliff Asness, holds the biggest position in Seagate Technology PLC (NASDAQ:STX). AQR Capital Management has a $150.2 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by First Eagle Investment Management, managed by Matt McLennan, which held a $138.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions include David Cohen and Harold Levy's Iridian Asset Management, Jim Simons's Renaissance Technologies and Matthew Hulsizer's PEAK6 Capital Management.
Due to the fact Seagate Technology PLC (NASDAQ:STX) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of money managers who were dropping their full holdings at the end of the second quarter. Interestingly, David Einhorn's Greenlight Capital dumped the largest investment of the 450+ funds we watch, valued at close to $197.1 million in call options.. Peter Adam Hochfelder's fund, Brahman Capital, also sold off its call options., about $36.6 million worth. These transactions are interesting, as total hedge fund interest was cut by 5 funds at the end of the second quarter.
Insider buying made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time period, Seagate Technology PLC (NASDAQ:STX) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to Seagate Technology PLC (NASDAQ:STX). These stocks are Brocade Communications Systems, Inc. (NASDAQ:BRCD), EMC Corporation (NYSE:EMC), Western Digital Corp. (NASDAQ:WDC), NetApp Inc. (NASDAQ:NTAP), and SanDisk Corporation (NASDAQ:SNDK). This group of stocks are the members of the data storage devices industry and their market caps resemble STX's market cap.