Should You Buy China Mobile Ltd. (ADR) (CHL)?

Page 1 of 2

China Mobile Ltd. (ADR) (NYSE:CHL) investors should be aware of an increase in activity from the world’s largest hedge funds recently.

To the average investor, there are tons of metrics market participants can use to watch their holdings. Two of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can outpace the market by a solid margin (see just how much).

ChinaMobileJust as integral, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. There are a number of motivations for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).

Now, let’s take a gander at the recent action surrounding China Mobile Ltd. (ADR) (NYSE:CHL).

How have hedgies been trading China Mobile Ltd. (ADR) (NYSE:CHL)?

At Q1’s end, a total of 16 of the hedge funds we track were bullish in this stock, a change of 7% from the first quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in China Mobile Ltd. (ADR) (NYSE:CHL). Fisher Asset Management has a $201.8 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $30 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Brian Taylor’s Pine River Capital Management.

As one would reasonably expect, key money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the most valuable position in China Mobile Ltd. (ADR) (NYSE:CHL). Renaissance Technologies had 29.1 million invested in the company at the end of the quarter. Brian Taylor’s Pine River Capital Management also initiated a $10.6 million position during the quarter. The other funds with brand new CHL positions are Joel Greenblatt’s Gotham Asset Management and Steven Cohen’s SAC Capital Advisors.

How are insiders trading China Mobile Ltd. (ADR) (NYSE:CHL)?

Insider buying is most useful when the company in question has seen transactions within the past 180 days. Over the last 180-day time period, China Mobile Ltd. (ADR) (NYSE:CHL) has experienced zero 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 China Mobile Ltd. (ADR) (NYSE:CHL). These stocks are Rogers Communications Inc. (USA) (NYSE:RCI), Telefonica Brasil SA (ADR) (NYSE:VIV), China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU), America Movil SAB de CV (ADR) (NYSE:AMX), and Vodafone Group Plc (ADR) (NASDAQ:VOD). This group of stocks belong to the wireless communications industry and their market caps are similar to CHL’s market cap.

Page 1 of 2