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Is Toyota Motor Corporation (ADR) (TM) Going to Burn These Hedge Funds?

Toyota Motor Corporation (ADR) (NYSE:TM) was in 14 hedge funds’ portfolio at the end of the fourth quarter of 2012. TM has seen an increase in hedge fund sentiment recently. There were 9 hedge funds in our database with TM positions at the end of the previous quarter. Today, shares of Toyota have been bitten by the volume bug, so to speak, as they’ve risen just 0.46% since market open, but volume is 371% higher than usual. Let’s look at some of the hedge fund managers that were making moves in advance of such action.

Toyota Motor Corporation (ADR) (NYSE:TM)

In today’s marketplace, there are a multitude of metrics shareholders can use to watch stocks. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outclass their index-focused peers by a solid margin (see just how much).

Equally as key, positive insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are a number of stimuli for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).

Now, let’s take a peek at the recent action regarding Toyota Motor Corporation (ADR) (NYSE:TM).

What have hedge funds been doing with Toyota Motor Corporation (ADR) (NYSE:TM)?

At year’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of 56% from the third quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably.

Of the funds we track, Ken Fisher’s Fisher Asset Management had the most valuable position in Toyota Motor Corporation (ADR) (NYSE:TM), worth close to $427 million, comprising 1.2% of its total 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $36 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Heebner’s Capital Growth Management, Jim Simons’s Renaissance Technologies and Michael Larson’s Bill & Melinda Gates Foundation Trust.

Now, key money managers have jumped into Toyota Motor Corporation (ADR) (NYSE:TM) headfirst. Capital Growth Management, managed by Ken Heebner, created the most outsized position in Toyota Motor Corporation (ADR) (NYSE:TM). Capital Growth Management had 26 million invested in the company at the end of the quarter. William B. Gray’s Orbis Investment Management also made a $3 million investment in the stock during the quarter. The following funds were also among the new TM investors: Crispin Odey’s Odey Asset Management Group, Dmitry Balyasny’s Balyasny Asset Management, and Jeffrey Vinik’s Vinik Asset Management.

How are insiders trading Toyota Motor Corporation (ADR) (NYSE:TM)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, Toyota Motor Corporation (ADR) (NYSE:TM) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Toyota Motor Corporation (ADR) (NYSE:TM). These stocks are Tata Motors Limited (ADR) (NYSE:TTM), General Motors Company (NYSE:GM), Nissan Motor Co., Ltd. (ADR) (PINK:NSANY), Ford Motor Company (NYSE:F), and Honda Motor Co Ltd (ADR) (NYSE:HMC). This group of stocks are in the auto manufacturers – major industry and their market caps match TM’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Tata Motors Limited (ADR) (NYSE:TTM) 17 0 0
General Motors Company (NYSE:GM) 98 2 0
Nissan Motor Co., Ltd. (ADR) (PINK:NSANY) 1 0 0
Ford Motor Company (NYSE:F) 58 0 11
Honda Motor Co Ltd (ADR) (NYSE:HMC) 9 0 0

With the results demonstrated by the aforementioned studies, retail investors should always pay attention to hedge fund and insider trading activity, and Toyota Motor Corporation (ADR) (NYSE:TM) is no exception.

Click here to learn why you should track hedge funds

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