Is PulteGroup, Inc. (NYSE:PHM) an exceptional investment right now? The smart money is selling. The number of long hedge fund positions were trimmed by 1 recently.
To the average investor, there are a multitude of gauges investors can use to watch Mr. Market. Two of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a superb margin (see just how much).
Just as integral, positive insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are a variety of motivations for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).
With these “truths” under our belt, it’s important to take a look at the recent action regarding PulteGroup, Inc. (NYSE:PHM).
What have hedge funds been doing with PulteGroup, Inc. (NYSE:PHM)?
At year’s end, a total of 31 of the hedge funds we track were bullish in this stock, a change of -3% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Capital Growth Management, managed by Ken Heebner, holds the most valuable position in PulteGroup, Inc. (NYSE:PHM). Capital Growth Management has a $161 million billion position in the stock, comprising 4.2% of its 13F portfolio. The second largest stake is held by Crispin Odey of Odey Asset Management Group, with a $121 million position; 5.9% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Donald Chiboucis’s Columbus Circle Investors, Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital and Israel Englander’s Millennium Management.
Since PulteGroup, Inc. (NYSE:PHM) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers that elected to cut their entire stakes last quarter. Intriguingly, Paul Ruddockáand Steve Heinz’s Lansdowne Partners dropped the largest stake of the “upper crust” of funds we key on, valued at close to $17 million in stock., and Stanley Druckenmiller of Duquesne Capital was right behind this move, as the fund sold off about $15 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds last quarter.
How have insiders been trading PulteGroup, Inc. (NYSE:PHM)?
Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the latest six-month time period, PulteGroup, Inc. (NYSE:PHM) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
With the returns shown by our studies, everyday investors should always pay attention to hedge fund and insider trading activity, and PulteGroup, Inc. (NYSE:PHM) applies perfectly to this mantra.
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