Estee Lauder Companies Inc (NYSE:EL) shareholders have witnessed a decrease in hedge fund interest of late.
In today’s marketplace, there are many indicators shareholders can use to analyze their holdings. A duo of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can trounce the market by a very impressive amount (see just how much).
Equally as key, positive insider trading activity is a second way to break down the marketplace. There are many motivations for an insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if shareholders understand where to look (learn more here).
Consequently, let’s take a peek at the recent action regarding Estee Lauder Companies Inc (NYSE:EL).
How are hedge funds trading Estee Lauder Companies Inc (NYSE:EL)?
In preparation for this year, a total of 23 of the hedge funds we track were long in this stock, a change of -12% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Andreas Halvorsen’s Viking Global had the largest position in Estee Lauder Companies Inc (NYSE:EL), worth close to $482 million, accounting for 3.3% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $117 million position; 0.7% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Robert Karr’s Joho Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and James Crichton and Adam Weiss’s Scout Capital Management.
Because Estee Lauder Companies Inc (NYSE:EL) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of funds that slashed their full holdings heading into 2013. Interestingly, David Stemerman’s Conatus Capital Management dropped the biggest stake of the “upper crust” of funds we watch, totaling an estimated $47 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into 2013.
Insider trading activity in Estee Lauder Companies Inc (NYSE:EL)
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Estee Lauder Companies Inc (NYSE:EL) has experienced zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
With the returns demonstrated by our tactics, everyday investors should always watch hedge fund and insider trading activity, and Estee Lauder Companies Inc (NYSE:EL) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.