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Tyco International Ltd. (TYC): Are Hedge Funds Right About This Stock?

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Tyco International Ltd. (NYSE:TYC) investors probably know every industrial metric in the book, but they might’ve missed what we’re about to cover.

To many of your fellow readers, hedge funds are seen as bloated, outdated investment vehicles of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open currently, Insider Monkey focuses on the upper echelon of this club, about 525 funds. Analysts calculate that this group oversees most of the smart money’s total capital, and by monitoring their best investments, we’ve come up with a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as crucial, bullish insider trading sentiment is another way to look at the financial markets. There are many incentives for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).

Tyco International Ltd. (NYSE:TYC)

Furthermore, we’re going to discuss the recent info for Tyco International Ltd. (NYSE:TYC).

How are hedge funds trading Tyco International Ltd. (NYSE:TYC)?

At Q2’s end, a total of 46 of the hedge funds we track held long positions in this stock, a change of 2% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly.

Out of the hedge funds we follow, David Cohen and Harold Levy’s Iridian Asset Management had the most valuable position in Tyco International Ltd. (NYSE:TYC), worth close to $228.7 million, accounting for 2.9% of its total 13F portfolio. Coming in second is First Eagle Investment Management, managed by Matt McLennan, which held a $179.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Sandy Nairn’s Edinburgh Partners, D. E. Shaw’s D E Shaw and Daniel S. Och’s OZ Management.

With a general bullishness amongst the titans, specific money managers were breaking ground themselves. Iridian Asset Management, managed by David Cohen and Harold Levy, initiated the biggest position in Tyco International Ltd. (NYSE:TYC). Iridian Asset Management had 228.7 million invested in the company at the end of the quarter. Matt McLennan’s First Eagle Investment Management also made a $179.4 million investment in the stock during the quarter. The following funds were also among the new TYC investors: Sandy Nairn’s Edinburgh Partners, D. E. Shaw’s D E Shaw, and Daniel S. Och’s OZ Management.

What do corporate executives and insiders think about Tyco International Ltd. (NYSE:TYC)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time period, Tyco International Ltd. (NYSE:TYC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Tyco International Ltd. (NYSE:TYC). These stocks are Checkpoint Systems, Inc. (NYSE:CKP), Ascent Capital Group Inc (NASDAQ:ASCMA), Brink’S Co (NYSE:BCO), The Geo Group, Inc. (NYSE:GEO), and ADT Corp (NYSE:ADT). This group of stocks are in the security & protection services industry and their market caps are closest to TYC’s market cap.

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