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Latest Smart Money Moves Involve Wells Fargo & Co (WFC), Qlik Technologies Inc. (QLIK) & More

Hedge fund closures reached the highest rate in 2015 since the financial crisis, according to fresh statistics. Some hedge fund clients appear to be quite disappointed with the poor results delivered by certain players in the hedge fund industry, while the sustained increase in the number of hedge fund vehicles in recent years has definitely put weight on the quality of hedge funds. A total number of 979 hedge funds closed their doors in 2015, up from 864 registered in 2014. The final quarter of 2015 also witnessed the lowest number of hedge fund openings since 2009, as only 183 funds were brought into being. With bad-performing hedge fund vehicles closing down at a high rate, the performance of the overall hedge fund industry should improve in the upcoming years. Having this in mind, let’s proceed to the discussion of four SEC filings recently submitted by several widely-known hedge funds and investment firms monitored by Insider Monkey.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).

According to a freshly-amended Schedule 13G, Warren Buffett’s Berkshire Hathaway currently owns 506.31 million shares of Wells Fargo & Co (NYSE:WFC), which account for 10% of the company’s total outstanding stock. This is up from the stake of 479.70 million shares reported by Mr. Buffett’s holding company in its 13F filing for the last quarter of 2015. As Warren Buffett’s stake reached 10%, his holding company may not be able to buy more shares of Wells Fargo without passing a Federal Reserve review. However, the Fed usually allows investors to acquire double-digit stakes in banks as long as those investors are not planning on exerting a controlling influence.

Wells Fargo & Co (NYSE:WFC) is the third-largest bank holding company in the United States in terms of assets, with assets of $1.8 trillion as of the end of 2015. Wells Fargo’s net income for 2015 totaled $22.9 billion (diluted earnings per share were $4.12), down from $23.1 billion ($4.10 diluted EPS) in 2014. The decrease was mainly driven by a $1.0 billion increase in the company’s provision for credit losses and a $937 million increase in non-interest expense, which were partly offset by a $1.8 billion increase in net interest income. The company’s 2015 revenue was $86.1 billion, which increased from $84.3 billion in 2014 and $83.8 billion in 2013. The increase in Wells Fargo’s top-line figure was mainly attributable to an increase in net interest income due to higher income from trading assets, investment securities, and loans. A total of 85 hedge funds from our database were invested in Wells Fargo at the end of December 2015, accumulating almost 12% of the bank’s outstanding common stock. Wells Fargo shares are down 11% in the past 12 months, which might have encouraged Mr. Buffett to boost his firm’s stake in the bank. Ken Fisher’s Fisher Asset Management holds an 18.99 million-share position in Wells Fargo & Co (NYSE:WFC) as of the end of 2015.

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Let’s head to the next pages of this article, where we discuss three separate SEC filings.

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