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Tesla Motors Inc (TSLA): The Data You Must See To Believe

Tesla Motors Inc (NASDAQ:TSLA) was in 16 hedge funds’ portfolio at the end of the fourth quarter of 2012. TSLA investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months, as in our experience, stagnancy is a bearish sign. There were 16 hedge funds in our database with TSLA positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are a multitude of metrics shareholders can use to watch Mr. Market. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can beat their index-focused peers by a significant margin (see just how much).

Tesla Motors Inc (NASDAQ:TSLA)Equally as integral, bullish insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are a variety of motivations for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if investors understand where to look (learn more here).

With all of this in mind, it’s important to take a peek at the key action surrounding Tesla Motors Inc (NASDAQ:TSLA).

How are hedge funds trading Tesla Motors Inc (NASDAQ:TSLA)?

At the end of the fourth quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly.

Of the funds we track, Drew Cupps’s Cupps Capital Management had the biggest position in Tesla Motors Inc (NASDAQ:TSLA), worth close to $20.3 million, accounting for 2.2% of its total 13F portfolio. On Cupps Capital Management’s heels is Lee Hobson of Highside Capital Management, with a $9.6 million position; 1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include James Crichton and Adam Weiss’s Scout Capital Management, John Griffin’s Blue Ridge Capital and John Murphy’s Alydar Capital.

Seeing as Tesla Motors Inc (NASDAQ:TSLA) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds who sold off their entire stakes at the end of the year. Interestingly, William Duhamel’s Route One Investment Company sold off the largest investment of all the hedgies we monitor, totaling close to $7.3 million in call options. David Costen Haley’s fund, HBK Investments, also dropped its call options., about $4.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Tesla Motors Inc (NASDAQ:TSLA)?

Insider buying is particularly usable when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Tesla Motors Inc (NASDAQ:TSLA) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Tesla Motors Inc (NASDAQ:TSLA). These stocks are Honda Motor Co Ltd (ADR) (NYSE:HMC), Ford Motor Company (NYSE:F), Nissan Motor Co., Ltd. (ADR) (PINK:NSANY), General Motors Company (NYSE:GM), and Tata Motors Limited (ADR) (NYSE:TTM). This group of stocks are in the auto manufacturers – major industry and their market caps are similar to TSLA’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Honda Motor Co Ltd (ADR) (NYSE:HMC) 9 0 0
Ford Motor Company (NYSE:F) 58 0 11
Nissan Motor Co., Ltd. (ADR) (PINK:NSANY) 1 0 0
General Motors Company (NYSE:GM) 98 2 2
Tata Motors Limited (ADR) (NYSE:TTM) 17 0 0

With the returns shown by the aforementioned research, everyday investors should always watch hedge fund and insider trading sentiment, and Tesla Motors Inc (NASDAQ:TSLA) is an important part of this process.

Click here to learn why you should track hedge funds

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