It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on the financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in WABCO Holdings Inc. (NYSE:WBC).
Hedge fund interest in WABCO Holdings Inc. (NYSE:WBC) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article, we will also compare WABCO Holdings Inc. (NYSE:WBC) to other stocks, including EQT GP Holdings LP (NYSE:EQGP), American Financial Group (NYSE:AFG), and W.P. Carey Inc. REIT (NYSE:WPC) to get a better sense of its popularity.
If you’d ask most stock holders, hedge funds are assumed to be underperforming, old financial tools of years past. While there are greater than an 8000 funds in operation at present, Our researchers look at the masters of this group, about 700 funds. These money managers direct most of the smart money’s total asset base, and by paying attention to their highest performing investments, Insider Monkey has identified various investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, we’re going to view the latest action surrounding WABCO Holdings Inc. (NYSE:WBC).
What have hedge funds been doing with WABCO Holdings Inc. (NYSE:WBC)?
Heading into Q4, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Berkshire Hathaway holds the most valuable position in WABCO Holdings Inc. (NYSE:WBC). Berkshire Hathaway has a $373.1 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Bob Peck and Andy Raab of FPR Partners, with a $215.9 million position; 5.4% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism comprise Alan Fournier’s Pennant Capital Management, Sharlyn C. Heslam’s Stockbridge Partners, and John Smith Clark’s Southpoint Capital Advisors.