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Waste Management, Inc. (WM): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

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At the moment, there are plenty of indicators market participants can use to track Mr. Market. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outperform the market by a significant amount (see just how much).

Equally as necessary, optimistic insider trading activity is another way to analyze the marketplace. Just as you’d expect, there are lots of motivations for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).

Waste Management, Inc.

Thus, it’s important to analyze the recent info about Waste Management, Inc. (NYSE:WM).

How are hedge funds trading Waste Management, Inc. (NYSE:WM)?

At the end of the second quarter, a total of 20 of the hedge funds we track were bullish in this stock, a change of 33% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially.

Out of the hedge funds we follow, Bill & Melinda Gates Foundation Trust, managed by Michael Larson, holds the largest position in Waste Management, Inc. (NYSE:WM). Bill & Melinda Gates Foundation Trust has a $751.5 million position in the stock, comprising 4.2% of its 13F portfolio. On Bill & Melinda Gates Foundation Trust’s heels is OZ Management, managed by Daniel S. Och, which held a $93.5 million call position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Mario Gabelli’s GAMCO Investors, Andrew Sandler’s Sandler Capital Management and Cliff Asness’s AQR Capital Management.

As one would understandably expect, particular hedge funds were breaking ground themselves. Bill & Melinda Gates Foundation Trust, managed by Michael Larson, established the largest position in Waste Management, Inc. (NYSE:WM). Bill & Melinda Gates Foundation Trust had 751.5 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $93.5 million investment in the stock during the quarter. The following funds were also among the new WM investors: Mario Gabelli’s GAMCO Investors, Andrew Sandler’s Sandler Capital Management, and Cliff Asness’s AQR Capital Management.

How have insiders been trading Waste Management, Inc. (NYSE:WM)?

Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the last six-month time frame, Waste Management, Inc. (NYSE:WM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators 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). All of these stocks are in the waste management industry and their market caps resemble WM’s market cap.

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