Is Herbalife Ltd. (NYSE:HLF) Going to Burn These Hedge Funds?

Herbalife Ltd. (NYSE:HLF) was in 31 hedge funds’ portfolio at the end of the fourth quarter of 2012. HLF shareholders have witnessed an increase in enthusiasm from smart money lately. There were 23 hedge funds in our database with HLF holdings at the end of the previous quarter.

Herbalife Ltd. (NYSE:HLF)

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Now, we’re going to take a gander at the latest action regarding Herbalife Ltd. (NYSE:HLF).

Hedge fund activity in Herbalife Ltd. (NYSE:HLF)

At the end of the fourth quarter, a total of 31 of the hedge funds we track were bullish in this stock, a change of 35% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Capital Growth Management, managed by Ken Heebner, holds the most valuable position in Herbalife Ltd. (NYSE:HLF). Capital Growth Management has a $110 million position in the stock, comprising 2.9% of its 13F portfolio. On Capital Growth Management’s heels is Third Point, managed by Dan Loeb, which held a $102 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Steven Richman’s East Side Capital (RR Partners), and Patrick McCormack’s Tiger Consumer Management.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Third Point, managed by Dan Loeb, created the biggest position in Herbalife Ltd. (NYSE:HLF). Third Point had 102 million invested in the company at the end of the quarter. Stephen Mandel’s Lone Pine Capital also made a $77 million investment in the stock during the quarter. The following funds were also among the new HLF investors: D. E. Shaw’s D E Shaw, Kenneth Mario Garschina’s Mason Capital Management, and Philippe Laffont’s Coatue Management.

What do corporate executives and insiders think about Herbalife Ltd. (NYSE:HLF)?

Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past half-year. Over the last half-year time frame, Herbalife Ltd. (NYSE:HLF) has experienced 2 unique insiders buying, and 3 insider sales (see the details of insider trades here).

With the returns demonstrated by Insider Monkey’s time-tested strategies, retail investors should always pay attention to hedge fund and insider trading activity, and Herbalife Ltd. (NYSE:HLF) applies perfectly to this mantra.

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