KeyCorp (NYSE:KEY): Hedge Funds and Insiders Are Bearish, What Should You Do?

KeyCorp (NYSE:KEY) was in 30 hedge funds’ portfolio at the end of December. KEY shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 36 hedge funds in our database with KEY holdings at the end of the previous quarter.

At the moment, there are tons of metrics shareholders can use to track the equity markets. Two of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the market by a very impressive margin (see just how much).

KeyCorpJust as beneficial, positive insider trading activity is another way to break down the world of equities. There are plenty of incentives for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).

Now, let’s take a look at the latest action regarding KeyCorp (NYSE:KEY).

What does the smart money think about KeyCorp (NYSE:KEY)?

At year’s end, a total of 30 of the hedge funds we track were long in this stock, a change of -17% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.

According to our comprehensive database, Martin Whitman’s Third Avenue Management had the biggest position in KeyCorp (NYSE:KEY), worth close to $172 million, accounting for 3.7% of its total 13F portfolio. On Third Avenue Management’s heels is Cliff Asness of AQR Capital Management, with a $101 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Richard S. Pzena’s Pzena Investment Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Judging by the fact that KeyCorp (NYSE:KEY) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers that elected to cut their positions entirely in Q4. At the top of the heap, Robert Pohly’s Samlyn Capital dumped the biggest investment of the “upper crust” of funds we watch, worth an estimated $41 million in stock., and Stanley Druckenmiller of Duquesne Capital was right behind this move, as the fund sold off about $23 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 6 funds in Q4.

Insider trading activity in KeyCorp (NYSE:KEY)

Insider buying is most useful when the company we’re looking at has seen transactions within the past six months. Over the last half-year time period, KeyCorp (NYSE:KEY) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading activity, and KeyCorp (NYSE:KEY) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.