Best Buy Co., Inc. (NYSE:BBY) was in 29 hedge funds’ portfolio at the end of the fourth quarter of 2012. BBY shareholders have witnessed a decrease in support from the world’s most elite money managers recently. There were 40 hedge funds in our database with BBY positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are plenty of indicators market participants can use to watch stocks. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outclass the broader indices by a solid margin (see just how much).
Just as key, optimistic insider trading activity is another way to parse down the financial markets. Obviously, there are many stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).
Now, it’s important to take a glance at the recent action regarding Best Buy Co., Inc. (NYSE:BBY).
How are hedge funds trading Best Buy Co., Inc. (NYSE:BBY)?
In preparation for this year, a total of 29 of the hedge funds we track were long in this stock, a change of -28% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Jeffrey Vinik’s Vinik Asset Management had the most valuable position in Best Buy Co., Inc. (NYSE:BBY), worth close to $92 million, accounting for 2.7% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $31 million position; 0.4% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Eric Mindich’s Eton Park Capital and Crispin Odey’s Odey Asset Management Group.
Judging by the fact that Best Buy Co., Inc. (NYSE:BBY) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that elected to cut their full holdings at the end of the year. It’s worth mentioning that Bruce Kovner’s Caxton Associates LP dropped the largest position of the 450+ funds we key on, totaling an estimated $60 million in call options, and Philippe Laffont of Coatue Management was right behind this move, as the fund sold off about $26 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 11 funds at the end of the year.
Insider trading activity in Best Buy Co., Inc. (NYSE:BBY)
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last half-year time period, Best Buy Co., Inc. (NYSE:BBY) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by our strategies, retail investors should always monitor hedge fund and insider trading activity, and Best Buy Co., Inc. (NYSE:BBY) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.