The Home Depot, Inc. (NYSE:HD) has experienced an increase in hedge fund sentiment of late. A confirmation of this came today from Jefferies, which announced about upgrading The Home Depot, Inc. (NYSE:HD).
At the moment, there are dozens of gauges investors can use to track publicly traded companies. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outclass the broader indices by a significant amount (see just how much).
Equally as integral, bullish insider trading activity is another way to break down the marketplace. There are many incentives for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the valuable potential of this method if you know where to look (learn more here).
Keeping this in mind, it’s important to take a gander at the key action regarding The Home Depot, Inc. (NYSE:HD).
How are hedge funds trading The Home Depot, Inc. (NYSE:HD)?
At year’s end, a total of 44 of the hedge funds we track were long in this stock, a change of 13% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the most valuable position in The Home Depot, Inc. (NYSE:HD), worth close to $512.3 million, comprising 1.4% of its total 13F portfolio. The second largest stake is held by Donald Chiboucis of Columbus Circle Investors, with a $143.1 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Patrick McCormack’s Tiger Consumer Management, Jim Simons’s Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Merchants’ Gate Capital, managed by Jason Capello, established the largest position in The Home Depot, Inc. (NYSE:HD). Merchants’ Gate Capital had 84.5 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also initiated a $18.9 million position during the quarter. The following funds were also among the new HD investors: Andrew Sandler’s Sandler Capital Management, Daniel S. Och’s OZ Management, and SAC Subsidiary’s CR Intrinsic Investors.
How are insiders trading The Home Depot, Inc. (NYSE:HD)?
Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last half-year time period, The Home Depot, Inc. (NYSE:HD) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to The Home Depot, Inc. (NYSE:HD). These stocks are Orchard Supply Hardware Stores Corp (NASDAQ:OSH), Builders FirstSource, Inc. (NASDAQ:BLDR), Lumber Liquidators Holdings Inc (NYSE:LL), , and Lowe’s Companies, Inc. (NYSE:LOW). This group of stocks belong to the home improvement stores industry and their market caps resemble HD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Orchard Supply Hardware Stores Corp (NASDAQ:OSH) | 6 | 0 | 1 |
| Builders FirstSource, Inc. (NASDAQ:BLDR) | 11 | 0 | 3 |
| Lumber Liquidators Holdings Inc (NYSE:LL) | 22 | 1 | 7 |
| Lowe’s Companies, Inc. (NYSE:LOW) | 43 | 0 | 11 |
With the returns shown by Insider Monkey’s research, retail investors must always pay attention to hedge fund and insider trading sentiment, and The Home Depot, Inc. (NYSE:HD) is no exception.
