ADT Corp (NYSE:ADT) investors should be aware of an increase in support from the world’s most elite money managers in recent months.
If you’d ask most market participants, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we at Insider Monkey hone in on the bigwigs of this group, around 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total capital, and by monitoring their highest performing picks, we have deciphered a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat 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 25 percentage points in 6.5 month (see the details here).
Equally as key, optimistic insider trading activity is another way to break down the investments you’re interested in. As the old adage goes: there are plenty of incentives for an executive to downsize shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).
Now, we’re going to take a peek at the key action surrounding ADT Corp (NYSE:ADT).
Hedge fund activity in ADT Corp (NYSE:ADT)
In preparation for this year, a total of 57 of the hedge funds we track were bullish in this stock, a change of 1800% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly.
Of the funds we track, Keith Meister’s Corvex Capital had the biggest position in ADT Corp (NYSE:ADT), worth close to $519 million, accounting for 24.1% of its total 13F portfolio. On Corvex Capital’s heels is Sean Cullinan of Point State Capital, with a $281 million position; the fund has 4.2% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Doug Silverman’s Senator Investment Group, David Cohen and Harold Levy’s Iridian Asset Management and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Corvex Capital, managed by Keith Meister, assembled the largest position in ADT Corp (NYSE:ADT). Corvex Capital had 519 million invested in the company at the end of the quarter. Sean Cullinan’s Point State Capital also made a $281 million investment in the stock during the quarter. The other funds with brand new ADT positions are Doug Silverman’s Senator Investment Group, Ken Griffin’s Citadel Investment Group, and Barry Rosenstein’s JANA Partners.
What do corporate executives and insiders think about ADT Corp (NYSE:ADT)?
Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time frame, ADT Corp (NYSE:ADT) has seen 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned tactics, retail investors must always pay attention to hedge fund and insider trading sentiment, and ADT Corp (NYSE:ADT) 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.