What Would a Smart Herbalife Ltd. (HLF) Investor Do?

Herbalife Ltd. (NYSE:HLF) has seen a decrease in enthusiasm from smart money of late.

If you’d ask most market participants, hedge funds are assumed to be slow, outdated financial tools of the past. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the moguls of this club, around 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total capital, and by tracking their best equity investments, we have formulated a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 23.3 percentage points in 8 months (see the details here).

Just as key, optimistic insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are a number of incentives for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).

With these “truths” under our belt, we’re going to take a look at the recent action encompassing Herbalife Ltd. (NYSE:HLF).

What does the smart money think about Herbalife Ltd. (NYSE:HLF)?

At the end of the first quarter, a total of 30 of the hedge funds we track held long positions in this stock, a change of -19% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.

Herbalife Ltd. (NYSE:HLF)According to our comprehensive database, Icahn Capital LP, managed by Carl Icahn, holds the most valuable position in Herbalife Ltd. (NYSE:HLF). Icahn Capital LP has a $612.5 million position in the stock, comprising 3.6% of its 13F portfolio. On Icahn Capital LP’s heels is Steven Richman of East Side Capital (RR Partners), with a $113.1 million position; 5.7% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Patrick McCormack’s Tiger Consumer Management, D. E. Shaw’s D E Shaw and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Due to the fact that Herbalife Ltd. (NYSE:HLF) has experienced bearish sentiment from the smart money, we can see that there were a few hedge funds that elected to cut their entire stakes last quarter. Intriguingly, Ken Heebner’s Capital Growth Management dumped the largest position of all the hedgies we key on, worth an estimated $110.2 million in stock., and Dan Loeb of Third Point was right behind this move, as the fund sold off about $102.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 7 funds last quarter.

How have insiders been trading Herbalife Ltd. (NYSE:HLF)?

Bullish insider trading is at its handiest when the company in focus has seen transactions within the past half-year. Over the last six-month time frame, Herbalife Ltd. (NYSE:HLF) has experienced 1 unique insiders buying, and 0 insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s time-tested strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Herbalife Ltd. (NYSE:HLF) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest Airports in the World

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!