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United Technologies Corporation (UTX) Bulls Beware

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United Technologies Corporation (NYSE:UTX) bulls beware.

To many of your fellow readers, hedge funds are viewed as useless, old investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds with their doors open currently, this site aim at the elite of this group, close to 525 funds. Analysts calculate that this group controls the majority of the hedge fund industry’s total assets, and by monitoring their best stock picks, we’ve deciphered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as crucial, optimistic insider trading sentiment is another way to look at the financial markets. As the old adage goes: there are a variety of motivations for a bullish insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

Thus, it’s important to analyze the newest info for United Technologies Corporation (NYSE:UTX).

United Technologies Corporation (NYSE:UTX)

How have hedgies been trading United Technologies Corporation (NYSE:UTX)?

In preparation for the third quarter, a total of 42 of the hedge funds we track were long in this stock, a change of -2% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably.

According to our 13F database, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in United Technologies Corporation (NYSE:UTX). Fisher Asset Management has a $514.7 million position in the stock, comprising 1.3% of its 13F portfolio. On Fisher Asset Management’s heels is Ric Dillon of Diamond Hill Capital, with a $257.2 million position; 2.8% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Bill Miller’s Legg Mason Capital Management, Ricky Sandler’s Eminence Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.

Since United Technologies Corporation (NYSE:UTX) has experienced bearish sentiment from the top-tier hedge fund industry, we can see that there was a specific group of hedge funds who sold off their full holdings at the end of the second quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest position of the “upper crust” of funds we key on, totaling about $7.9 million in call options., and Bruce Kovner of Caxton Associates LP was right behind this move, as the fund cut about $7 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds at the end of the second quarter.

What do corporate executives and insiders think about United Technologies Corporation (NYSE:UTX)?

Legal insider trading, particularly when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past half-year. Over the last half-year time period, United Technologies Corporation (NYSE:UTX) has experienced zero unique insiders buying, and 12 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 United Technologies Corporation (NYSE:UTX). These stocks are TransDigm Group Incorporated (NYSE:TDG), Rockwell Collins, Inc. (NYSE:COL), General Dynamics Corporation (NYSE:GD), Lockheed Martin Corporation (NYSE:LMT), and The Boeing Company (NYSE:BA). This group of stocks belong to the aerospace/defense products & services industry and their market caps are similar to UTX’s market cap.

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