Is Clearwire Corporation (NASDAQ:CLWR) undervalued? The smart money is reducing their bets on the stock. The number of long hedge fund bets retreated by 7 lately.
At the moment, there are a multitude of gauges investors can use to watch publicly traded companies. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outperform the broader indices by a significant amount (see just how much).
Equally as key, positive insider trading activity is another way to parse down the marketplace. Obviously, there are a number of stimuli for an executive to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this method if piggybackers understand where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the latest action surrounding Clearwire Corporation (NASDAQ:CLWR).
How are hedge funds trading Clearwire Corporation (NASDAQ:CLWR)?
Heading into Q2, a total of 28 of the hedge funds we track held long positions in this stock, a change of -20% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Mark McGoldrick and Jason Maynard’s Mouth Kellett Capital Management had the largest position in Clearwire Corporation (NASDAQ:CLWR), worth close to $172.3 million, comprising 22.4% of its total 13F portfolio. The second largest stake is held by Larry Robbins of Glenview Capital, with a $103.9 million position; 1.1% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Kenneth Mario Garschina’s Mason Capital Management, John Paulson’s Paulson & Co and John Brennan’s Sirios Capital Management.
Since Clearwire Corporation (NASDAQ:CLWR) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies who were dropping their entire stakes in Q1. Intriguingly, Josh Resnick’s Jericho Capital Asset Management sold off the biggest stake of all the hedgies we track, totaling about $37.7 million in stock.. Anand Parekh’s fund, Alyeska Investment Group, also dropped its stock, about $11.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 7 funds in Q1.
How have insiders been trading Clearwire Corporation (NASDAQ:CLWR)?
Insider trading activity, especially when it’s bullish, is best served when the company in question has experienced transactions within the past 180 days. Over the latest six-month time frame, Clearwire Corporation (NASDAQ:CLWR) has experienced 1 unique insiders purchasing, and 7 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 Clearwire Corporation (NASDAQ:CLWR). These stocks are TIM Participacoes SA (ADR) (NYSE:TSU), Telephone & Data Systems, Inc. (NYSE:TDS), United States Cellular Corporation (NYSE:USM), MetroPCS Communications Inc (NYSE:PCS), and Portugal Telecom, SGPS (ADR) (NYSE:PT). All of these stocks are in the wireless communications industry and their market caps are similar to CLWR’s market cap.