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ICICI Bank Limited (ADR) (NYSE:IBN): Are Hedge Funds Right About This Stock? – Deutsche Bank AG (USA) (NYSE:DB), Bancolombia S.A. (ADR) (NYSE:CIB)

Is ICICI Bank Limited (ADR) (NYSE:IBN) a buy, sell, or hold? The smart money is getting more optimistic. The number of long hedge fund positions rose by 2 recently.

To most investors, hedge funds are viewed as worthless, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we choose to focus on the elite of this group, close to 450 funds. It is estimated that this group has its hands on the majority of all hedge funds’ total capital, and by tracking their best equity investments, we have unearthed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to 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 (see the details here).

ICICI Bank Limited (ADR) (NYSE:IBN)Just as important, bullish insider trading activity is a second way to parse down the marketplace. There are many stimuli for an executive to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this strategy if you understand what to do (learn more here).

Consequently, we’re going to take a look at the recent action encompassing ICICI Bank Limited (ADR) (NYSE:IBN).

How are hedge funds trading ICICI Bank Limited (ADR) (NYSE:IBN)?

In preparation for this year, a total of 15 of the hedge funds we track were long in this stock, a change of 15% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, Viking Global, managed by Andreas Halvorsen, holds the largest position in ICICI Bank Limited (ADR) (NYSE:IBN). Viking Global has a $52 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which held a $22 million position; 0.8% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Stanley Druckenmiller’s Duquesne Capital, Dmitry Balyasny’s Balyasny Asset Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Now, specific money managers were breaking ground themselves. Duquesne Capital, managed by Stanley Druckenmiller, created the largest position in ICICI Bank Limited (ADR) (NYSE:IBN). Duquesne Capital had 10 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $7 million position during the quarter. The following funds were also among the new IBN investors: Robert B. Gillam’s McKinley Capital Management, Ken Griffin’s Citadel Investment Group, and Bart Baum’s Ionic Capital Management.

What have insiders been doing with ICICI Bank Limited (ADR) (NYSE:IBN)?

Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the latest six-month time frame, ICICI Bank Limited (ADR) (NYSE:IBN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to ICICI Bank Limited (ADR) (NYSE:IBN). These stocks are Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA), Bancolombia S.A. (ADR) (NYSE:CIB), Banco de Chile (ADR) (NYSE:BCH), Deutsche Bank AG (USA) (NYSE:DB), and Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG). This group of stocks are in the foreign regional banks industry and their market caps match IBN’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Banco Bilbao Vizcaya Argentaria SA (ADR) (NYSE:BBVA) 4 0 0
Bancolombia S.A. (ADR) (NYSE:CIB) 5 0 0
Banco de Chile (ADR) (NYSE:BCH) 2 0 0
Deutsche Bank AG (USA) (NYSE:DB) 11 0 0
Shinhan Financial Group Co., Ltd. (ADR) (NYSE:SHG) 2 0 0

With the results demonstrated by our time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and ICICI Bank Limited (ADR) (NYSE:IBN) is an important part of this process.

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Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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