EMC Corporation (NYSE:EMC) has witnessed stagnant interest from the smart money of late, and Mr. Market has been the same, as the stock is up only 1.5% year-to-date. Who’s at least partially responsible for the mediocracy?
In today’s marketplace, there are many gauges shareholders can use to monitor the equity markets. A duo of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can beat the market by a significant margin (see just how much).
Equally as useful, optimistic insider trading sentiment is a second way to look at the investments you’re interested in. Just as you’d expect, there are a variety of motivations for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this strategy if you know where to look (learn more here).
Now that that’s out of the way, it’s important to examine the recent info surrounding EMC Corporation (NYSE:EMC).
How have hedgies been trading EMC Corporation (NYSE:EMC)?
At Q2’s end, a total of 59 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially.
According to our 13F database, David Costen Haley’s HBK Investments had the largest position in EMC Corporation (NYSE:EMC), worth close to $413.2 million, comprising 7% of its total 13F portfolio. On HBK Investments’s heels is Cadian Capital, managed by Eric Bannasch, which held a $233.4 million position; 7.2% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Andrew J. M. Spokes’s Farallon Capital, D. E. Shaw’s D E Shaw and Bill Miller’s Legg Mason Capital Management.
Because EMC Corporation (NYSE:EMC) has witnessed a fall in interest from upper-tier hedge fund managers, we can see that there was a specific group of money managers that slashed their full holdings at the end of the second quarter. Intriguingly, Doug Silverman and Alexander Klabin’s Senator Investment Group dropped the largest stake of all the hedgies we track, valued at about $119.5 million in stock. Panayotis æTakisÆ Sparaggis’s fund, Alkeon Capital Management, also dumped its stock, about $95.8 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about EMC Corporation (NYSE:EMC)?
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past six months. Over the latest 180-day time frame, EMC Corporation (NYSE:EMC) has seen zero unique insiders buying, and 12 insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to EMC Corporation (NYSE:EMC). These stocks are Brocade Communications Systems, Inc. (NASDAQ:BRCD), Western Digital Corp. (NASDAQ:WDC), NetApp Inc. (NASDAQ:NTAP), Seagate Technology PLC (NASDAQ:STX), and SanDisk Corporation (NASDAQ:SNDK). This group of stocks belong to the data storage devices industry and their market caps match EMC’s market cap.