Delphi Automotive PLC (NYSE:DLPH) was in 38 hedge funds’ portfolio at the end of the fourth quarter of 2012. DLPH has experienced a decrease in hedge fund interest of late. There were 41 hedge funds in our database with DLPH holdings at the end of the previous quarter.
In the eyes of most market participants, hedge funds are seen as worthless, old financial vehicles of years past. While there are greater than 8000 funds in operation at present, we at Insider Monkey hone in on the elite of this group, close to 450 funds. It is widely believed that this group controls most of the smart money’s total capital, and by keeping an eye on their highest performing investments, we have deciphered a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. Just as you’d expect, there are lots of reasons for an executive to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if “monkeys” know what to do (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action surrounding Delphi Automotive PLC (NYSE:DLPH).
How have hedgies been trading Delphi Automotive PLC (NYSE:DLPH)?
Heading into 2013, a total of 38 of the hedge funds we track held long positions in this stock, a change of -7% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Elliott Management, managed by Paul Singer, holds the biggest position in Delphi Automotive PLC (NYSE:DLPH). Elliott Management has a $969 million billion position in the stock, comprising 29.6% of its 13F portfolio. Coming in second is Paulson & Co, managed by John Paulson, which held a $517 million position; 15.5% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Edward A. Mule’s Silver Point Capital, Mark T. Gallogly’s Centerbridge Partners and Dan Loeb’s Third Point.
Because Delphi Automotive PLC (NYSE:DLPH) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of money managers who were dropping their full holdings heading into 2013. It’s worth mentioning that Douglas Hirsch’s Seneca Capital cut the biggest stake of the 450+ funds we track, worth an estimated $28 million in stock., and Don Morgan of Brigade Capital was right behind this move, as the fund dumped about $28 million worth. These moves are interesting, as aggregate hedge fund interest fell by 3 funds heading into 2013.
How are insiders trading Delphi Automotive PLC (NYSE:DLPH)?
Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time frame, Delphi Automotive PLC (NYSE:DLPH) has seen zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
With the results exhibited by the aforementioned tactics, everyday investors should always keep an eye on hedge fund and insider trading activity, and Delphi Automotive PLC (NYSE:DLPH) is no exception.
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