Is Ericsson (ADR) (NASDAQ:ERIC) worth your attention right now? Prominent investors are becoming hopeful. The number of long hedge fund bets inched up by 3 lately. We’ll also compare the company to peers like Nokia Corporation (ADR) (NYSE:NOK) and QUALCOMM, Inc. (NASDAQ:QCOM) get a better idea of where it stands.
In the 21st century investor’s toolkit, there are many metrics shareholders can use to analyze Mr. Market. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outperform their index-focused peers by a very impressive amount (see just how much).
Equally as important, optimistic insider trading sentiment is a second way to parse down the marketplace. There are lots of stimuli for an executive to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the recent action encompassing Ericsson (ADR) (NASDAQ:ERIC).
How are hedge funds trading Ericsson (ADR) (NASDAQ:ERIC)?
Heading into 2013, a total of 14 of the hedge funds we track were long in this stock, a change of 27% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially.
Of the funds we track, David Gallo’s Valinor Management LLC had the largest position in Ericsson (ADR) (NASDAQ:ERIC), worth close to $60 million, comprising 2.6% of its total 13F portfolio. The second largest stake is held by John Hurley of Cavalry Asset Management, with a $38 million position; the fund has 7.8% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Lee Ainslie’s Maverick Capital, George Soros’s Soros Fund Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As aggregate interest increased, key hedge funds were breaking ground themselves. Soros Fund Management, managed by George Soros, established the largest position in Ericsson (ADR) (NASDAQ:ERIC). Soros Fund Management had 9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $5 million investment in the stock during the quarter. The following funds were also among the new ERIC investors: Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, D. E. Shaw’s D E Shaw, and William B. Gray’s Orbis Investment Management.
What do corporate executives and insiders think about Ericsson (ADR) (NASDAQ:ERIC)?
Bullish insider trading is particularly usable when the company in question has seen transactions within the past half-year. Over the latest half-year time period, Ericsson (ADR) (NASDAQ:ERIC) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Ericsson (ADR) (NASDAQ:ERIC). Some of these stocks are Echostar Corporation (NASDAQ:SATS), Harris Corporation (NYSE:HRS), QUALCOMM, Inc. (NASDAQ:QCOM), and Nokia Corporation (ADR) (NYSE:NOK).
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Echostar Corporation (NASDAQ:SATS)||16||0||7|
|Harris Corporation (NYSE:HRS)||21||0||6|
|Nokia Corporation (ADR) (NYSE:NOK)||12||0||0|
|QUALCOMM, Inc. (NASDAQ:QCOM)||89||0||16|
|Motorola Solutions Inc (NYSE:MSI)||35||0||6|
With the results shown by our studies, everyday investors must always monitor hedge fund and insider trading activity, and Ericsson (ADR) (NASDAQ:ERIC) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.