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Visteon Corp (VC): Hedge Funds Are Bearish and Insiders Are Undecided, What Should You Do?

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Visteon Corp (NYSE:VC) investors: have you seen this data yet?

If you were to ask many market players, hedge funds are perceived as useless, old financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds in operation today, this site looks at the bigwigs of this group, close to 525 funds. It is widely held that this group has its hands on the majority of all hedge funds’ total capital, and by monitoring their highest performing picks, we’ve spotted a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as crucial, positive insider trading activity is another way to look at the stock market universe. Just as you’d expect, there are plenty of incentives for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).

Visteon Corp

Thus, it’s important to examine the newest info for Visteon Corp (NYSE:VC).

Hedge fund activity in Visteon Corp (NYSE:VC)

At the end of the second quarter, a total of 41 of the hedge funds we track were bullish in this stock, a change of -15% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings significantly.

According to our 13F database, JANA Partners, managed by Barry Rosenstein, holds the most valuable position in Visteon Corp (NYSE:VC). JANA Partners has a $139.4 million position in the stock, comprising 2% of its 13F portfolio. The second largest stake is held by Solus Alternative Asset Management, managed by Christopher Pucillo, which held a $133.3 million position; the fund has 47% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Mark T. Gallogly’s Centerbridge Partners, Steven Cohen’s SAC Capital Advisors and Jonathon Jacobson’s Highfields Capital Management.

Since Visteon Corp (NYSE:VC) has faced a fall in interest from the top-tier hedge fund industry, logic holds that there exists a select few fund managers who were dropping their full holdings at the end of the second quarter. Interestingly, Randall Smith’s Alden Global Capital said goodbye to the biggest investment of the 450+ funds we watch, comprising about $60.8 million in stock, and Wayne Cooperman of Cobalt Capital Management was right behind this move, as the fund said goodbye to about $25.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 7 funds at the end of the second quarter.

How have insiders been trading Visteon Corp (NYSE:VC)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in focus has seen transactions within the past half-year. Over the latest 180-day time frame, Visteon Corp (NYSE:VC) has experienced zero unique insiders buying, and 1 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 Visteon Corp (NYSE:VC). These stocks are Allison Transmission Holdings Inc (NYSE:ALSN), WABCO Holdings Inc. (NYSE:WBC), Tenneco Inc (NYSE:TEN), Dana Holding Corporation (NYSE:DAN), and Gentex Corporation (NASDAQ:GNTX). This group of stocks are the members of the auto parts industry and their market caps are closest to VC’s market cap.

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