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Should You Avoid Philippine Long Distance Telephone (ADR) (PHI)?

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Philippine Long Distance Telephone (ADR) (NYSE:PHI) shareholders have witnessed a decrease in hedge fund interest lately.

According to most market participants, hedge funds are assumed to be slow, old financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we look at the leaders of this club, close to 450 funds. It is estimated that this group controls most of all hedge funds’ total asset base, and by monitoring their top picks, we have found a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Philippine Long Distance Telephone (ADR) (NYSE:PHI)

Just as important, bullish insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are many motivations for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if piggybackers know where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the key action surrounding Philippine Long Distance Telephone (ADR) (NYSE:PHI).

How have hedgies been trading Philippine Long Distance Telephone (ADR) (NYSE:PHI)?

In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, Jim Simons’s Renaissance Technologies had the most valuable position in Philippine Long Distance Telephone (ADR) (NYSE:PHI), worth close to $111.9 million, accounting for 0.3% of its total 13F portfolio. On Renaissance Technologies’s heels is D E Shaw, managed by D. E. Shaw, which held a $4.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Jean-Marie Eveillard’s First Eagle Investment Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Because Philippine Long Distance Telephone (ADR) (NYSE:PHI) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds who were dropping their entire stakes last quarter. Interestingly, Bruce Kovner’s Caxton Associates LP sold off the largest investment of all the hedgies we track, worth an estimated $0.4 million in stock. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Philippine Long Distance Telephone (ADR) (NYSE:PHI)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time period, Philippine Long Distance Telephone (ADR) (NYSE:PHI) has experienced zero unique insiders purchasing, 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 Philippine Long Distance Telephone (ADR) (NYSE:PHI). These stocks are BT Group plc (ADR) (NYSE:BT), Verisign, Inc. (NASDAQ:VRSN), KT Corporation (ADR) (NYSE:KT), France Telecom SA (ADR) (NYSE:FTE), and PT Telekomunikasi Indonesia (ADR) (NYSE:TLK). This group of stocks belong to the telecom services – foreign industry and their market caps are closest to PHI’s market cap.

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