Is Credit Suisse Group AG (ADR) (NYSE:CS) worth your attention right now? Prominent investors are turning less bullish. The number of long hedge fund bets decreased by 1 lately.
To most investors, hedge funds are assumed to be unimportant, old investment vehicles of the past. While there are over 8000 funds trading at the moment, we choose to focus on the elite of this club, around 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by paying attention to their best picks, we have brought to light a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, bullish insider trading sentiment is another way to break down the world of equities. There are a number of stimuli for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).
Keeping this in mind, let’s take a look at the latest action encompassing Credit Suisse Group AG (ADR) (NYSE:CS).
What does the smart money think about Credit Suisse Group AG (ADR) (NYSE:CS)?
Heading into Q2, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Marathon Asset Management, managed by Bruce J. Richards and Louis Hanover, holds the most valuable position in Credit Suisse Group AG (ADR) (NYSE:CS). Marathon Asset Management has a $18.3 million position in the stock, comprising 1.1% of its 13F portfolio. The second largest stake is held by Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $8.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Matthew Hulsizer’s PEAK6 Capital Management, Michael Messner’s Seminole Capital (Investment Mgmt) and David Dreman’s Dreman Value Management.
Judging by the fact that Credit Suisse Group AG (ADR) (NYSE:CS) has experienced bearish sentiment from the smart money, we can see that there lies a certain “tier” of hedge funds that elected to cut their entire stakes last quarter. At the top of the heap, Rob Citrone’s Discovery Capital Management cut the largest position of the “upper crust” of funds we watch, valued at about $27.5 million in stock., and Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital was right behind this move, as the fund dumped about $9 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds last quarter.
Insider trading activity in Credit Suisse Group AG (ADR) (NYSE:CS)
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Credit Suisse Group AG (ADR) (NYSE:CS) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Credit Suisse Group AG (ADR) (NYSE:CS). These stocks are Banco Santander, S.A. (ADR) (NYSE:SAN), UBS AG (USA) (NYSE:UBS), Barclays PLC (ADR) (NYSE:BCS), Lloyds Banking Group PLC (ADR) (NYSE:LYG), and Royal Bank of Scotland Group plc (ADR) (NYSE:RBS). This group of stocks are in the foreign money center banks industry and their market caps resemble CS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Banco Santander, S.A. (ADR) (NYSE:SAN) | 17 | 1 | 0 |
| UBS AG (USA) (NYSE:UBS) | 13 | 0 | 0 |
| Barclays PLC (ADR) (NYSE:BCS) | 13 | 0 | 0 |
| Lloyds Banking Group PLC (ADR) (NYSE:LYG) | 9 | 0 | 0 |
| Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) | 14 | 0 | 0 |
With the results exhibited by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Credit Suisse Group AG (ADR) (NYSE:CS) is no exception.
