Is Chunghwa Telecom Co., Ltd (ADR) (CHT) Going to Burn These Hedge Funds?

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Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT) was in 7 hedge funds’ portfolio at the end of the first quarter of 2013. CHT has seen a decrease in hedge fund sentiment lately. There were 7 hedge funds in our database with CHT holdings at the end of the previous quarter.

At the moment, there are tons of methods investors can use to monitor their holdings. A pair of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outclass the market by a superb margin (see just how much).

RENAISSANCE TECHNOLOGIESEqually as beneficial, positive insider trading activity is a second way to break down the financial markets. There are lots of reasons for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).

Keeping this in mind, we’re going to take a glance at the latest action surrounding Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT).

How are hedge funds trading Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT)?

Heading into Q2, a total of 7 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, Jim Simons’s Renaissance Technologies had the biggest position in Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT), worth close to $7.8 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $6.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Francis Chou’s Chou Associates Management, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.

Because Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT) has experienced a declination in interest from the smart money, it’s safe to say that there is a sect of fund managers who were dropping their entire stakes heading into Q2. At the top of the heap, Bruce Kovner’s Caxton Associates LP cut the biggest stake of the “upper crust” of funds we track, valued at close to $0.5 million in stock. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT)?

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last six-month time period, Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT) has experienced zero unique insiders purchasing, and zero 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 Chunghwa Telecom Co., Ltd (ADR) (NYSE:CHT). These stocks are AT&T Inc. (NYSE:T), Windstream Corporation (NASDAQ:WIN), Verizon Communications Inc. (NYSE:VZ), CenturyLink, Inc. (NYSE:CTL), and BCE Inc. (USA) (NYSE:BCE). This group of stocks belong to the telecom services – domestic industry and their market caps resemble CHT’s market cap.

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