Hedge Funds Are Crazy About Alcatel Lucent SA (ADR) (NYSE:ALU)

Is Alcatel Lucent SA (ADR) (NYSE:ALU) a great investment today? The smart money is buying. The number of bullish hedge fund bets went up by 4 lately.

In the eyes of most traders, hedge funds are perceived as slow, outdated investment tools of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the leaders of this group, around 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their highest performing equity investments, we have deciphered a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Equally as important, positive insider trading activity is another way to break down the marketplace. Obviously, there are plenty of incentives for an executive to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).

With all of this in mind, it’s important to take a gander at the recent action surrounding Alcatel Lucent SA (ADR) (NYSE:ALU).

How are hedge funds trading Alcatel Lucent SA (ADR) (NYSE:ALU)?

In preparation for this year, a total of 12 of the hedge funds we track held long positions in this stock, a change of 50% from the third quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes considerably.

According to our comprehensive database, SAC Capital Advisors, managed by Steven Cohen, holds the most valuable position in Alcatel Lucent SA (ADR) (NYSE:ALU). SAC Capital Advisors has a $54 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Andrew Feldstein and Stephen Siderow of Blue Mountain Capital, with a $8 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Brett Hendrickson’s Nokomis Capital, John Murphy’s Alydar Capital and Jim Simons’s Renaissance Technologies.

Now, specific money managers were breaking ground themselves. SAC Capital Advisors, managed by Steven Cohen, established the most outsized position in Alcatel Lucent SA (ADR) (NYSE:ALU). SAC Capital Advisors had 54 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital also initiated a $8 million position during the quarter. The other funds with new positions in the stock are Brett Hendrickson’s Nokomis Capital, John Murphy’s Alydar Capital, and Israel Englander’s Millennium Management.

How have insiders been trading Alcatel Lucent SA (ADR) (NYSE:ALU)?

Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time period, Alcatel Lucent SA (ADR) (NYSE:ALU) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results shown by Insider Monkey’s strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Alcatel Lucent SA (ADR) (NYSE:ALU) applies perfectly to this mantra.

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