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CenturyLink, Inc. (NYSE:CTL): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

CenturyLink, Inc. (NYSE:CTL) was in 19 hedge funds’ portfolio at the end of the fourth quarter of 2012. CTL investors should be aware of a decrease in hedge fund sentiment of late. There were 22 hedge funds in our database with CTL holdings at the end of the previous quarter.

In the financial world, there are a multitude of metrics shareholders can use to analyze Mr. Market. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can beat the S&P 500 by a significant margin (see just how much).

Just as beneficial, optimistic insider trading activity is another way to break down the marketplace. Obviously, there are plenty of stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if “monkeys” know what to do (learn more here).

Consequently, let’s take a look at the latest action surrounding CenturyLink, Inc. (NYSE:CTL).

How are hedge funds trading CenturyLink, Inc. (NYSE:CTL)?

Heading into 2013, a total of 19 of the hedge funds we track were bullish in this stock, a change of -14% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Phill Gross and Robert Atchinson’s Adage Capital Management had the biggest position in CenturyLink, Inc. (NYSE:CTL), worth close to $96 million, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Alpine Associates, managed by Robert Emil Zoellner, which held a $36 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Clint Carlson’s Carlson Capital, Ken Griffin’s Citadel Investment Group and David Harding’s Winton Capital Management.

Seeing as CenturyLink, Inc. (NYSE:CTL) has witnessed declining sentiment from hedge fund managers, logic holds that there is a sect of hedgies who were dropping their positions entirely in Q4. At the top of the heap, Jim Simons’s Renaissance Technologies dropped the biggest stake of the 450+ funds we track, valued at close to $14 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $9 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 3 funds in Q4.

How are insiders trading CenturyLink, Inc. (NYSE:CTL)?

Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time period, CenturyLink, Inc. (NYSE:CTL) has seen 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).

With the returns shown by the aforementioned research, everyday investors must always watch hedge fund and insider trading activity, and CenturyLink, Inc. (NYSE:CTL) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.