This Metric Says You Are Smart to Buy Alcatel Lucent SA (ADR) (ALU)

Alcatel Lucent SA (ADR) (NYSE:ALU) was in 17 hedge funds’ portfolio at the end of March. ALU has experienced an increase in support from the world’s most elite money managers of late. There were 16 hedge funds in our database with ALU positions at the end of the previous quarter.

Alcatel Lucent SA (ADR) (NYSE:ALU)

At the moment, there are a multitude of methods shareholders can use to analyze publicly traded companies. Two of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can beat the broader indices by a superb margin (see just how much).

Equally as key, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are plenty of reasons for an executive to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the key action surrounding Alcatel Lucent SA (ADR) (NYSE:ALU).

What have hedge funds been doing with Alcatel Lucent SA (ADR) (NYSE:ALU)?

At Q1’s end, a total of 17 of the hedge funds we track were bullish in this stock, a change of 6% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.

Of the funds we track, Steven Cohen’s SAC Capital Advisors had the biggest position in Alcatel Lucent SA (ADR) (NYSE:ALU), worth close to $45.8 million, comprising 0.2% of its total 13F portfolio. Coming in second is Jericho Capital Asset Management, managed by Josh Resnick, which held a $24.9 million position; 2.6% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Brett Hendrickson’s Nokomis Capital, Scott Fine and Peter Richards’s Empire Capital Management and Joseph A. Jolson’s Harvest Capital Strategies.

As industrywide interest jumped, some big names have been driving this bullishness. Empire Capital Management, managed by Scott Fine and Peter Richards, initiated the biggest position in Alcatel Lucent SA (ADR) (NYSE:ALU). Empire Capital Management had 9.6 million invested in the company at the end of the quarter. Joseph A. Jolson’s Harvest Capital Strategies also made a $7.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Gregory A. Weaver’s Invicta Capital Management, SAC Subsidiary’s Sigma Capital Management, and Michael Kao’s Akanthos Capital.

Insider trading activity in Alcatel Lucent SA (ADR) (NYSE:ALU)

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, Alcatel Lucent SA (ADR) (NYSE:ALU) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Alcatel Lucent SA (ADR) (NYSE:ALU). These stocks are Acme Packet, Inc. (NASDAQ:APKT), Exelis Inc (NYSE:XLS), ViaSat, Inc. (NASDAQ:VSAT), Echostar Corporation (NASDAQ:SATS), and JDS Uniphase Corp (NASDAQ:JDSU). This group of stocks are the members of the communication equipment industry and their market caps match ALU’s market cap.