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This Metric Says You Are Smart to Buy Companhia de Bebidas das Americas (ADR) (ABV)

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Now, according to many of your fellow readers, hedge funds are seen as overrated, outdated investment vehicles of a period lost to current times. Although there are more than 8,000 hedge funds in operation in present day, this site aim at the moguls of this club, close to 525 funds. It is widely held that this group controls most of the hedge fund industry’s total assets, and by keeping an eye on their best stock picks, we’ve unsheathed a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started 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 a sample of our picks).

Just as necessary, optimistic insider trading sentiment is another way to analyze the financial markets. As the old adage goes: there are many motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if “monkeys” know what to do (learn more here).

Thus, let’s discuss the recent info surrounding Companhia de Bebidas das Americas (ADR) (NYSE:ABV).

How have hedgies been trading Companhia de Bebidas das Americas (ADR) (NYSE:ABV)?

At Q2’s end, a total of 23 of the hedge funds we track were long in this stock, a change of 15% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially.

Companhia de Bebidas das Americas (ADR) (NYSE:ABV)According to our 13F database, Ken Fisher’s Fisher Asset Management had the most valuable position in Companhia de Bebidas das Americas (ADR) (NYSE:ABV), worth close to $350.1 million, comprising 0.9% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $124.4 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include William von Mueffling’s Cantillon Capital Management, Lee Ainslie’s Maverick Capital and SAC Subsidiary’s Sigma Capital Management.

As aggregate interest spiked, particular hedge funds were breaking ground themselves. Fisher Asset Management, managed by Ken Fisher, created the most valuable position in Companhia de Bebidas das Americas (ADR) (NYSE:ABV). Fisher Asset Management had 350.1 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $124.4 million investment in the stock during the quarter. The other funds with brand new ABV positions are William von Mueffling’s Cantillon Capital Management, Lee Ainslie’s Maverick Capital, and SAC Subsidiary’s Sigma Capital Management.

What do corporate executives and insiders think about Companhia de Bebidas das Americas (ADR) (NYSE:ABV)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time frame, Companhia de Bebidas das Americas (ADR) (NYSE:ABV) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Companhia de Bebidas das Americas (ADR) (NYSE:ABV). These stocks are Boston Beer Co Inc (NYSE:SAM), Compania Cervecerias Unidas S.A. (ADR) (NYSE:CCU), Molson Coors Brewing Company (NYSE:TAP), Fomento Economico Mexicano SAB (ADR) (NYSE:FMX), and Anheuser-Busch InBev NV (ADR) (NYSE:BUD). This group of stocks are in the beverages – brewers industry and their market caps are closest to ABV’s market cap.

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