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United Continental Holdings Inc (UAL): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

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United Continental Holdings Inc (NYSE:UAL) was in 46 hedge funds’ portfolio at the end of the first quarter of 2013. UAL has seen an increase in hedge fund interest in recent months. There were 38 hedge funds in our database with UAL holdings at the end of the previous quarter.

At the moment, there are dozens of gauges shareholders can use to track stocks. Two of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the S&P 500 by a superb amount (see just how much).

United Continental Holdings Inc (NYSE:UAL)Just as important, bullish insider trading sentiment is another way to parse down the world of equities. Obviously, there are a variety of motivations for an executive to downsize shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a gander at the recent action surrounding United Continental Holdings Inc (NYSE:UAL).

What have hedge funds been doing with United Continental Holdings Inc (NYSE:UAL)?

At Q1’s end, a total of 46 of the hedge funds we track were bullish in this stock, a change of 21% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, GMT Capital, managed by Thomas E. Claugus, holds the most valuable position in United Continental Holdings Inc (NYSE:UAL). GMT Capital has a $334.7 million position in the stock, comprising 7.6% of its 13F portfolio. The second largest stake is held by Appaloosa Management LP, managed by David Tepper, which held a $272.4 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Crispin Odey’s Odey Asset Management Group, Bill Miller’s Legg Mason Capital Management and Ken Heebner’s Capital Growth Management.

As aggregate interest increased, key money managers were breaking ground themselves. Odey Asset Management Group, managed by Crispin Odey, established the largest position in United Continental Holdings Inc (NYSE:UAL). Odey Asset Management Group had 131.4 million invested in the company at the end of the quarter. Randall Smith’s Alden Global Capital also initiated a $57.7 million position during the quarter. The other funds with brand new UAL positions are Tom Wagner and Ara Cohen’s Knighthead Capital, Sean Cullinan’s Point State Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

What do corporate executives and insiders think about United Continental Holdings Inc (NYSE:UAL)?

Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, United Continental Holdings Inc (NYSE:UAL) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to United Continental Holdings Inc (NYSE:UAL). These stocks are Spirit Airlines Incorporated (NASDAQ:SAVE), US Airways Group, Inc. (NYSE:LCC), and Delta Air Lines, Inc. (NYSE:DAL). This group of stocks are in the major airlines industry and their market caps are similar to UAL’s market cap.

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