Bank of America Corp (NYSE:BAC) was in 93 hedge funds’ portfolio at the end of the fourth quarter of 2012. BAC shareholders have witnessed an increase in hedge fund interest recently. There were 92 hedge funds in our database with BAC positions at the end of the previous quarter. This is worth pointing out, as the bank’s latest EPS figures were at $0.20, below analysts’ estimates of $0.22 per share.
In the 21st century investor’s toolkit, there are tons of gauges market participants can use to track publicly traded companies. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can beat the S&P 500 by a superb amount (see just how much).
Just as integral, bullish insider trading sentiment is another way to break down the marketplace. Just as you’d expect, there are lots of reasons for an executive to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).
Now, we’re going to take a gander at the recent action encompassing Bank of America Corp (NYSE:BAC).
What does the smart money think about Bank of America Corp (NYSE:BAC)?
Heading into 2013, a total of 93 of the hedge funds we track were long in this stock, a change of 1% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Bruce Berkowitz’s Fairholme (FAIRX) had the most valuable position in Bank of America Corp (NYSE:BAC), worth close to $1.1659 billion, comprising 16.8% of its total 13F portfolio. Sitting at the No. 2 spot is Platinum Asset Management, managed by Kerr Neilson, which held a $434 million position; the fund has 9.7% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Paul Ruddockáand Steve Heinz’s Lansdowne Partners and Richard S. Pzena’s Pzena Investment Management.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Lansdowne Partners, managed by Paul Ruddockáand Steve Heinz, initiated the largest position in Bank of America Corp (NYSE:BAC). Lansdowne Partners had 307.8 million invested in the company at the end of the quarter. John Armitage’s Egerton Capital Limited also made a $148.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Rob Citrone’s Discovery Capital Management, and Kevin Michael Ulrich’s Anchorage Advisors.
How are insiders trading Bank of America Corp (NYSE:BAC)?
Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past 180 days. Over the last six-month time period, Bank of America Corp (NYSE:BAC) has seen 1 unique insiders buying, 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 Bank of America Corp (NYSE:BAC). These stocks are Toronto-Dominion Bank (USA) (NYSE:TD), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), Wells Fargo & Co (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C). This group of stocks are the members of the money center banks industry and their market caps resemble BAC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Toronto-Dominion Bank (USA) (NYSE:TD) | 10 | 0 | 0 |
| Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) | 12 | 0 | 0 |
| Wells Fargo & Co (NYSE:WFC) | 80 | 1 | 3 |
| JPMorgan Chase & Co. (NYSE:JPM) | 93 | 1 | 7 |
| Citigroup Inc. (NYSE:C) | 108 | 2 | 1 |
With the returns shown by the aforementioned research, retail investors should always pay attention to hedge fund and insider trading sentiment, and Bank of America Corp (NYSE:BAC) shareholders fit into this picture quite nicely.
