Toronto-Dominion Bank (USA) (NYSE:TD) shareholders have witnessed a decrease in enthusiasm from smart money in recent months, and we’re going to take a look at how some of its peers, like Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) have fared as well.
If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated investment tools of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the masters of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total capital, and by monitoring their top equity investments, we have uncovered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as beneficial, positive insider trading sentiment is a second way to break down the financial markets. Obviously, there are plenty of incentives for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).
Keeping this in mind, let’s take a peek at the latest action encompassing Toronto-Dominion Bank (USA) (NYSE:TD).
Hedge fund activity in Toronto-Dominion Bank (USA) (NYSE:TD)
At year’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of -9% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Daniel Bubis’s Tetrem Capital Management had the most valuable position in Toronto-Dominion Bank (USA) (NYSE:TD), worth close to $265 million, comprising 8% of its total 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $13 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Malcolm Fairbairn’s Ascend Capital, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Judging by the fact that Toronto-Dominion Bank (USA) (NYSE:TD) has faced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few hedge funds that decided to sell off their entire stakes at the end of the year. It’s worth mentioning that David Costen Haley’s HBK Investments sold off the largest position of the “upper crust” of funds we key on, worth an estimated $1 million in stock. Louis Navellier’s fund, Navellier & Associates, also dumped its stock. These moves are intriguing to say the least, as aggregate hedge fund interest fell by one fund at the end of the year.
How have insiders been trading Toronto-Dominion Bank (USA) (NYSE:TD)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Toronto-Dominion Bank (USA) (NYSE:TD) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Toronto-Dominion Bank (USA) (NYSE:TD). Some of these stocks are Bank of Montreal (USA) (NYSE:BMO), Citigroup Inc. (NYSE:C), and Bank of America Corp (NYSE:BAC).
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Bank of Montreal (USA) (NYSE:BMO)||10||0||0|
|Citigroup Inc. (NYSE:C)||108||2||1|
|Bank of America Corp (NYSE:BAC)||93||1||0|
|Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU)||12||0||0|
|The Bank of Nova Scotia (USA) (NYSE:BNS)||12||0||0|
With the results demonstrated by Insider Monkey’s strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Toronto-Dominion Bank (USA) (NYSE:TD) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.