General Motors Company (NYSE:GM) was in 98 hedge funds’ portfolio at the end of the fourth quarter of 2012. GM investors should pay attention to an increase in activity from the world’s largest hedge funds lately. There were 95 hedge funds in our database with GM positions at the end of the previous quarter.
To most traders, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds in operation today, we at Insider Monkey look at the masters of this club, about 450 funds. It is estimated that this group oversees the lion’s share of all hedge funds’ total asset base, and by paying attention to their highest performing equity investments, we have spotted a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as key, positive insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are a number of reasons for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).
With these “truths” under our belt, let’s take a peek at the recent action encompassing General Motors Company (NYSE:GM).
What does the smart money think about General Motors Company (NYSE:GM)?
At year’s end, a total of 98 of the hedge funds we track were long in this stock, a change of 3% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Warren Buffett’s Berkshire Hathaway had the largest position in General Motors Company (NYSE:GM), worth close to $720.8 million, accounting for 1% of its total 13F portfolio. The second largest stake is held by David Einhorn of Greenlight Capital, with a $610.4 million position; 9.6% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Frank Brosens’s Taconic Capital, and William B. Gray’s Orbis Investment Management.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Samlyn Capital, managed by Robert Pohly, initiated the most valuable position in General Motors Company (NYSE:GM). Samlyn Capital had 35.5 million invested in the company at the end of the quarter. Anthony Bozza’s Lakewood Capital Management also initiated a $34.7 million position during the quarter. The following funds were also among the new GM investors: Rob Citrone’s Discovery Capital Management, James Dinan’s York Capital Management, and John Bader’s Halcyon Asset Management.
Insider trading activity in General Motors Company (NYSE:GM)
Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past six months. Over the last half-year time period, General Motors Company (NYSE:GM) has seen 2 unique insiders buying, and 2 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 General Motors Company (NYSE:GM). These stocks are Toyota Motor Corporation (ADR) (NYSE:TM), Tata Motors Limited (ADR) (NYSE:TTM), Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), and Nissan Motor Co., Ltd. (ADR) (PINK:NSANY). This group of stocks belong to the auto manufacturers – major industry and their market caps match GM’s market cap.