Is Philip Morris International Inc. (NYSE:PM) the right investment to pursue these days? Investors who are in the know are becoming less hopeful. The number of bullish hedge fund bets went down by 7 recently.
According to most shareholders, hedge funds are perceived as unimportant, old investment vehicles of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the top tier of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds’ total capital, and by watching their highest performing picks, we have figured out a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped 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 (check out a sample of our picks).
Just as beneficial, positive insider trading sentiment is another way to parse down the financial markets. Obviously, there are lots of reasons for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a gander at the latest action encompassing Philip Morris International Inc. (NYSE:PM).
Hedge fund activity in Philip Morris International Inc. (NYSE:PM)
In preparation for this year, a total of 46 of the hedge funds we track were long in this stock, a change of -13% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.
Of the funds we track, Tom Russo’s Gardner Russo & Gardner had the most valuable position in Philip Morris International Inc. (NYSE:PM), worth close to $669 million, comprising 9.2% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Fisher of Fisher Asset Management, with a $479 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and D. E. Shaw’s D E Shaw.
Judging by the fact that Philip Morris International Inc. (NYSE:PM) has experienced falling interest from the aggregate hedge fund industry, logic holds that there is a sect of money managers that slashed their full holdings heading into 2013. Interestingly, Bill Miller’s Legg Mason Capital Management said goodbye to the largest position of the “upper crust” of funds we track, totaling about $50 million in stock.. James Crichton and Adam Weiss’s fund, Scout Capital Management, also dumped its call options., about $49 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 7 funds heading into 2013.
How are insiders trading Philip Morris International Inc. (NYSE:PM)?
Insider buying is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Philip Morris International Inc. (NYSE:PM) has seen 2 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned tactics, retail investors must always monitor hedge fund and insider trading sentiment, and Philip Morris International Inc. (NYSE:PM) applies perfectly to this mantra.
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.