Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small-caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Is The Bank of New York Mellon Corporation (NYSE:BK) a buy, a sell, or a hold? Investors who are in the know are taking a bearish view. The number of long hedge fund bets retreated by 13 recently. At the end of this article we will also compare BK to other stocks including McKesson Corporation (NYSE:MCK), Carnival plc (ADR) (NYSE:CUK), and Dominion Resources, Inc. (NYSE:D) to get a better sense of its popularity.
If you’d ask most shareholders, hedge funds are perceived as worthless, outdated investment vehicles of the past. While there are over 8,000 funds trading at the moment, we look at the masters of this group, about 700 funds. Most estimates calculate that this group of people command the majority of the smart money’s total asset base, and by observing their finest stock picks, Insider Monkey has brought to light several investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to analyze the key action encompassing The Bank of New York Mellon Corporation (NYSE:BK).
How are hedge funds trading The Bank of New York Mellon Corporation (NYSE:BK)?
At the end of the third quarter, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a fall of 21% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes considerably (or had already accumulated large positions).
Of the funds tracked by Insider Monkey, Nelson Peltz’s Trian Partners has the number one position in The Bank of New York Mellon Corporation (NYSE:BK), worth close to $1.18 billion, corresponding to 10.1% of its total 13F portfolio. On Trian Partners’s heels is Berkshire Hathaway, led by Warren Buffett, holding a $787.4 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers with similar optimism consist of Richard McGuire’s Marcato Capital Management, Andreas Halvorsen’s Viking Global, and Donald Yacktman’s Yacktman Asset Management.