Coca-Cola Enterprises Inc (CCE)’s Shares Rally Amid Better-Than-Expected Earnings, Merger Rumors

At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 123% and beating the market by more than 66 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.

While looking at the insider activity of Coca-Cola Enterprises Inc (NYSE:CCE), there were at least ten insider sales processed in 2015. The CEO of the company, Mr. Brock, sold 437,614 shares of the company in 2015, in two equal transactions of 218,807 shares. William W. Douglas, Executive Vice President at Coca-Cola Enterprises, Inc. (CCE), was another insider to sell, divesting himself of 193,824 shares of the company in 2015.

With a stable hedge fund outlook and positive second quarter results, along with the possibility of an operations-improving merger (or two), we recommend a long position in Coca-Cola Enterprise at this time.

Disclosure: None