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This Data Might Be Nokia Corporation (ADR) (NOK)’s Worst Nightmare

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The following data might just make Nokia Corporation (ADR) (NYSE:NOK) a sell.

Now, according to many investors, hedge funds are assumed to be bloated, old investment vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open today, this site focuses on the bigwigs of this club, around 525 funds. Analysts calculate that this group oversees the lion’s share of the smart money’s total capital, and by keeping an eye on their best stock picks, we’ve spotted a few investment strategies that have historically outstripped the broader indices. 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as key, optimistic insider trading sentiment is another way to look at the financial markets. Obviously, there are a number of stimuli for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).

Nokia Corporation (ADR) (NOK)

Now that that’s out of the way, let’s discuss the newest info about Nokia Corporation (ADR) (NYSE:NOK).

How have hedgies been trading Nokia Corporation (ADR) (NYSE:NOK)?

Heading into Q3, a total of 11 of the hedge funds we track were long in this stock, a change of -21% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings substantially.

Out of the hedge funds we follow, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the most valuable position in Nokia Corporation (ADR) (NYSE:NOK), worth close to $121.7 million, accounting for 0.9% of its total 13F portfolio. Coming in second is Chou Associates Management, managed by Francis Chou, which held a $18.7 million position; the fund has 5% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, Michael Hintze’s CQS Cayman LP and Dmitry Balyasny’s Balyasny Asset Management.

Due to the fact Nokia Corporation (ADR) (NYSE:NOK) has witnessed declining interest from the smart money’s best and brightest, we can see that there is a sect of money managers that elected to cut their entire stakes at the end of the second quarter. At the top of the heap, Jim Simons’s Renaissance Technologies sold off the largest stake of the 450+ funds we watch, totaling close to $36.2 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund cut about $12.5 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds at the end of the second quarter.

How have insiders been trading Nokia Corporation (ADR) (NYSE:NOK)?

Insider buying is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, Nokia Corporation (ADR) (NYSE:NOK) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Nokia Corporation (ADR) (NYSE:NOK). These stocks are JDS Uniphase Corp (NASDAQ:JDSU), Echostar Corporation (NASDAQ:SATS), Ericsson (ADR) (NASDAQ:ERIC), Harris Corporation (NYSE:HRS), and Motorola Solutions Inc (NYSE:MSI). This group of stocks are in the communication equipment industry and their market caps are closest to NOK’s market cap.

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