To many market players, hedge funds are seen as bloated, old financial tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey looks at the upper echelon of this group, close to 525 funds. It is assumed that this group controls most of all hedge funds’ total assets, and by monitoring their highest performing stock picks, we’ve come up with a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as necessary, optimistic insider trading activity is a second way to look at the financial markets. Just as you’d expect, there are a variety of stimuli for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).
Furthermore, let’s study the newest info about Royal Bank of Scotland Group plc (ADR) (NYSE:RBS).
What does the smart money think about Royal Bank of Scotland Group plc (ADR) (NYSE:RBS)?
Heading into Q3, a total of 13 of the hedge funds we track held long positions in this stock, a change of -7% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.
Out of the hedge funds we follow, Vertex One Asset Management, managed by John Thiessen, holds the largest position in Royal Bank of Scotland Group plc (ADR) (NYSE:RBS). Vertex One Asset Management has a $47.7 million position in the stock, comprising 8.2% of its 13F portfolio. Sitting at the No. 2 spot is John Thiessen of Vertex One Asset Management, with a $14.7 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Daniel Arbess’s Xerion, John Paulson’s Paulson & Co and John Paulson’s Paulson & Co.
As Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) has faced a fall in interest from the top-tier hedge fund industry, logic holds that there exists a select few fund managers that elected to cut their entire stakes heading into Q2. It’s worth mentioning that John Paulson’s Paulson & Co sold off the largest stake of the 450+ funds we watch, worth an estimated $14.4 million in stock. John Paulson’s fund, Paulson & Co, also cut its stock, about $9.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds heading into Q2.
Insider trading activity in Royal Bank of Scotland Group plc (ADR) (NYSE:RBS)
Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Royal Bank of Scotland Group plc (ADR) (NYSE:RBS). These stocks are Banco Santander, S.A. (ADR) (NYSE:SAN), Credit Suisse Group AG (ADR) (NYSE:CS), UBS AG (USA) (NYSE:UBS), Barclays PLC (ADR) (NYSE:BCS), and Lloyds Banking Group PLC (ADR) (NYSE:LYG). All of these stocks are in the foreign money center banks industry and their market caps match RBS’s market cap.