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Waste Management, Inc. (NYSE:WM): Are Hedge Funds Right About This Stock? – Waste Connections, Inc. (NYSE:WCN), Stericycle Inc (NASDAQ:SRCL)

Waste Management, Inc. (NYSE:WM) investors should be aware of a decrease in activity from the world’s largest hedge funds lately.

In today’s marketplace, there are a multitude of methods investors can use to watch their holdings. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can beat the broader indices by a healthy margin (see just how much).

Waste Management, Inc.

Just as important, positive insider trading activity is another way to break down the stock market universe. Obviously, there are lots of reasons for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).

Keeping this in mind, let’s take a gander at the recent action surrounding Waste Management, Inc. (NYSE:WM).

What does the smart money think about Waste Management, Inc. (NYSE:WM)?

At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -19% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings significantly.

Of the funds we track, Bill & Melinda Gates Foundation Trust, managed by Michael Larson, holds the biggest position in Waste Management, Inc. (NYSE:WM). Bill & Melinda Gates Foundation Trust has a $629 million position in the stock, comprising 3.7% of its 13F portfolio. Sitting at the No. 2 spot is OZ Management, managed by Daniel S. Och, which held a $111 million call position; 1.2% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Barry Rosenstein’s JANA Partners, Mario Gabelli’s GAMCO Investors and Cliff Asness’s AQR Capital Management.

Seeing as Waste Management, Inc. (NYSE:WM) has witnessed bearish sentiment from the smart money, it’s safe to say that there was a specific group of money managers that elected to cut their positions entirely last quarter. It’s worth mentioning that Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners cut the biggest stake of all the hedgies we watch, comprising about $3 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund dumped about $1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 3 funds last quarter.

What have insiders been doing with Waste Management, Inc. (NYSE:WM)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Waste Management, Inc. (NYSE:WM) has seen zero unique insiders purchasing, and 15 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Waste Management, Inc. (NYSE:WM). These stocks are Clean Harbors Inc (NYSE:CLH), Waste Connections, Inc. (NYSE:WCN), Veolia Environnement SA (ADR) (NYSE:VE), Stericycle Inc (NASDAQ:SRCL), and Republic Services, Inc. (NYSE:RSG). This group of stocks are the members of the waste management industry and their market caps resemble WM’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Clean Harbors Inc (NYSE:CLH) 15 0 7
Waste Connections, Inc. (NYSE:WCN) 11 0 8
Veolia Environnement SA (ADR) (NYSE:VE) 3 0 0
Stericycle Inc (NASDAQ:SRCL) 10 0 7
Republic Services, Inc. (NYSE:RSG) 19 1 2

With the returns demonstrated by the aforementioned time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Waste Management, Inc. (NYSE:WM) applies perfectly to this mantra.

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