Is Kellogg Company (NYSE:K) a good investment today? Money managers are in a bearish mood. The number of bullish hedge fund bets decreased by 7 recently.
To the average investor, there are tons of gauges investors can use to track stocks. A pair of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can beat the market by a significant amount (see just how much).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the marketplace. There are many stimuli for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).
Keeping this in mind, let’s take a look at the recent action regarding Kellogg Company (NYSE:K).
Hedge fund activity in Kellogg Company (NYSE:K)
In preparation for this year, a total of 15 of the hedge funds we track were bullish in this stock, a change of -32% from the third quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Kellogg Company (NYSE:K). Citadel Investment Group has a $190 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $51 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Due to the fact that Kellogg Company (NYSE:K) has witnessed declining sentiment from hedge fund managers, we can see that there is a sect of hedge funds that elected to cut their entire stakes at the end of the year. Interestingly, Richard Schimel’s Diamondback Capital said goodbye to the largest stake of all the hedgies we track, worth close to $8 million in stock.. Israel Englander’s fund, Catapult Capital Management, also dropped its stock, about $6 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 7 funds at the end of the year.
What do corporate executives and insiders think about Kellogg Company (NYSE:K)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Kellogg Company (NYSE:K) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
With the returns exhibited by Insider Monkey’s time-tested strategies, retail investors should always watch hedge fund and insider trading activity, and Kellogg Company (NYSE:K) is an important part of this process.
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.