China Telecom Corporation Limited (ADR) (NYSE:CHA) investors should pay attention to a decrease in hedge fund interest lately.
To the average investor, there are plenty of metrics market participants can use to track the equity markets. A couple of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can trounce the broader indices by a significant margin (see just how much).
Just as important, optimistic insider trading sentiment is another way to break down the stock market universe. Obviously, there are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).
Consequently, let’s take a gander at the latest action surrounding China Telecom Corporation Limited (ADR) (NYSE:CHA).
What have hedge funds been doing with China Telecom Corporation Limited (ADR) (NYSE:CHA)?
At the end of the fourth quarter, a total of 5 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the biggest position in China Telecom Corporation Limited (ADR) (NYSE:CHA). Arrowstreet Capital has a $4.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, with a $3.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.
Judging by the fact that China Telecom Corporation Limited (ADR) (NYSE:CHA) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedgies that slashed their full holdings heading into 2013. Interestingly, Peter J. Eichler Jr.’s Aletheia Research and Management said goodbye to the biggest stake of all the hedgies we track, totaling about $2.5 million in stock., and Bruce Kovner of Caxton Associates LP was right behind this move, as the fund said goodbye to about $0.3 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading China Telecom Corporation Limited (ADR) (NYSE:CHA)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time period, China Telecom Corporation Limited (ADR) (NYSE:CHA) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to China Telecom Corporation Limited (ADR) (NYSE:CHA). These stocks are NTT Docomo Inc (ADR) (NYSE:DCM), France Telecom SA (ADR) (NYSE:FTE), Telefonica S.A. (ADR) (NYSE:TEF), Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT), and BT Group plc (ADR) (NYSE:BT). This group of stocks are the members of the telecom services – foreign industry and their market caps are closest to CHA’s market cap.