Banco Bradesco SA (ADR) (NYSE:BBD) was in 12 hedge funds’ portfolio at the end of the fourth quarter of 2012. BBD investors should be aware of a decrease in enthusiasm from smart money lately. There were 17 hedge funds in our database with BBD positions at the end of the previous quarter.
To the average investor, there are many gauges market participants can use to monitor stocks. Two 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 outpace the market by a solid amount (see just how much).
Just as beneficial, positive insider trading activity is a second way to break down the world of equities. Just as you’d expect, there are a number of motivations for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).
Keeping this in mind, let’s take a glance at the recent action regarding Banco Bradesco SA (ADR) (NYSE:BBD).
How have hedgies been trading Banco Bradesco SA (ADR) (NYSE:BBD)?
At year’s end, a total of 12 of the hedge funds we track held long positions in this stock, a change of -29% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in Banco Bradesco SA (ADR) (NYSE:BBD). Arrowstreet Capital has a $87.6 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Cantillon Capital Management, managed by William von Mueffling, which held a $79 million position; the fund has 3% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Fisher’s Fisher Asset Management, Cliff Asness’s AQR Capital Management and Stanley Druckenmiller’s Duquesne Capital.
Because Banco Bradesco SA (ADR) (NYSE:BBD) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few hedgies that decided to sell off their entire stakes at the end of the year. At the top of the heap, Peter J. Eichler Jr.’s Aletheia Research and Management said goodbye to the biggest stake of the “upper crust” of funds we key on, worth an estimated $2.6 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $2.2 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 5 funds at the end of the year.
How are insiders trading Banco Bradesco SA (ADR) (NYSE:BBD)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, Banco Bradesco SA (ADR) (NYSE:BBD) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Banco Bradesco SA (ADR) (NYSE:BBD). These stocks are Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), Royal Bank of Canada (USA) (NYSE:RY), Mizuho Financial Group Inc. (ADR) (NYSE:MFG), and Sumitomo Mitsui Financial Grp, Inc. (ADR) (NYSE:SMFG). This group of stocks are the members of the foreign regional banks industry and their market caps match BBD’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA)||4||0||0|
|Royal Bank of Canada (USA) (NYSE:RY)||12||0||0|
|Mizuho Financial Group Inc. (ADR) (NYSE:MFG)||5||0||0|
|Sumitomo Mitsui Financial Grp, Inc. (ADR) (NYSE:SMFG)||8||0||0|
With the results shown by our time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading activity, and Banco Bradesco SA (ADR) (NYSE:BBD) shareholders fit into this picture quite nicely.