Is The Coca-Cola Company (NYSE:KO) ready to raly soon? Hedge funds are getting less optimistic. The number of bullish hedge fund bets shrunk by 8 recently.
To the average investor, there are a multitude of indicators market participants can use to analyze their holdings. A duo of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the broader indices by a healthy amount (see just how much).
Equally as important, positive insider trading activity is another way to parse down the marketplace. Obviously, there are many motivations for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).
Consequently, we’re going to take a look at the recent action encompassing The Coca-Cola Company (NYSE:KO).
How have hedgies been trading The Coca-Cola Company (NYSE:KO)?
Heading into 2013, a total of 58 of the hedge funds we track held long positions in this stock, a change of -12% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially.
According to our comprehensive database, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in The Coca-Cola Company (NYSE:KO). Berkshire Hathaway has a $14.5 billion position in the stock, comprising 19.3% of its 13F portfolio. Coming in second is Michael Larson of Bill & Melinda Gates Foundation Trust, with a $1.233 billion position; 2.1% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Boykin Curry’s Eagle Capital Management, Donald Yacktman’s Yacktman Asset Management and Ken Fisher’s Fisher Asset Management.
Because The Coca-Cola Company (NYSE:KO) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few funds that decided to sell off their full holdings last quarter. It’s worth mentioning that Peter J. Eichler Jr.’s Aletheia Research and Management dumped the biggest position of all the hedgies we monitor, valued at close to $41 million in stock.. James Crichton and Adam Weiss’s fund, Scout Capital Management, also dumped its call options., about $30 million worth. These transactions are important to note, as total hedge fund interest fell by 8 funds last quarter.
What have insiders been doing with The Coca-Cola Company (NYSE:KO)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has seen transactions within the past 180 days. Over the last six-month time period, The Coca-Cola Company (NYSE:KO) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
With the results shown by the aforementioned studies, retail investors should always pay attention to hedge fund and insider trading activity, and The Coca-Cola Company (NYSE:KO) is an important part of this process.
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