Is Time Warner Inc (NYSE:TWX) the right pick for your portfolio? Money managers are turning less bullish. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
In the 21st century investor’s toolkit, there are dozens of metrics investors can use to analyze Mr. Market. A couple 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 top money managers can outclass the market by a significant amount (see just how much).
Equally as important, positive insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are a number of stimuli for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).
With all of this in mind, we’re going to take a glance at the latest action surrounding Time Warner Inc (NYSE:TWX).
How are hedge funds trading Time Warner Inc (NYSE:TWX)?
In preparation for this year, a total of 43 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Andreas Halvorsen’s Viking Global had the largest position in Time Warner Inc (NYSE:TWX), worth close to $936 million, comprising 6.5% of its total 13F portfolio. Sitting at the No. 2 spot is Coatue Management, managed by Philippe Laffont, which held a $486 million position; 0.5% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Ken Griffin’s Citadel Investment Group, John Griffin’s Blue Ridge Capital and Mario Gabelli’s GAMCO Investors.
Because Time Warner Inc (NYSE:TWX) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their full holdings heading into 2013. Intriguingly, Jeffrey Tannenbaum’s Fir Tree dropped the largest stake of the 450+ funds we watch, worth about $78 million in stock., and Peter J. Eichler Jr. of Aletheia Research and Management was right behind this move, as the fund said goodbye to about $20 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Time Warner Inc (NYSE:TWX)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last half-year time frame, Time Warner Inc (NYSE:TWX) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey’s research, everyday investors must always watch hedge fund and insider trading activity, and Time Warner Inc (NYSE:TWX) shareholders fit into this picture quite nicely.
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.