Do Hedge Funds and Insiders Love Barclays PLC (ADR) (BCS)?

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Is Barclays PLC (ADR) (NYSE:BCS) ready to raly soon? Money managers are getting less bullish. The number of long hedge fund bets dropped by 4 recently.

Barclays PLC (ADR) (NYSE:BCS)Credit: Barclays PLC (ADR) (NYSE:BCS)

To most traders, hedge funds are assumed to be worthless, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the masters of this group, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by keeping an eye on their best picks, we have come up with a few investment strategies that have historically outperformed the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as key, optimistic insider trading sentiment is a second way to break down the stock market universe. As the old adage goes: there are plenty of incentives for an insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the key action encompassing Barclays PLC (ADR) (NYSE:BCS).

What does the smart money think about Barclays PLC (ADR) (NYSE:BCS)?

Heading into 2013, a total of 11 of the hedge funds we track held long positions in this stock, a change of -27% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.

When looking at the hedgies we track, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the biggest position in Barclays PLC (ADR) (NYSE:BCS), worth close to $40.2 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is John Overdeck and David Siegel of Two Sigma Advisors, with a $4.6 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Andy Redleaf’s Whitebox Advisors.

Since Barclays PLC (ADR) (NYSE:BCS) has witnessed a declination in interest from the smart money, it’s safe to say that there were a few hedge funds that slashed their entire stakes last quarter. At the top of the heap, Jim Simons’s Renaissance Technologies dumped the biggest stake of the 450+ funds we key on, comprising about $11.4 million in stock.. Richard Schimel’s fund, Diamondback Capital, also cut its stock, about $2 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 4 funds last quarter.

What have insiders been doing with Barclays PLC (ADR) (NYSE:BCS)?

Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past half-year. Over the last 180-day time frame, Barclays PLC (ADR) (NYSE:BCS) has seen zero unique insiders buying, 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 Barclays PLC (ADR) (NYSE:BCS). These stocks are Itau Unibanco Holding SA (ADR) (NYSE:ITUB), Banco Santander, S.A. (ADR) (NYSE:SAN), Royal Bank of Scotland Group plc (ADR) (NYSE:RBS), Lloyds Banking Group PLC (ADR) (NYSE:LYG), and UBS AG (USA) (NYSE:UBS). This group of stocks are in the foreign money center banks industry and their market caps match BCS’s market cap.

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