Dell Inc. (NASDAQ:DELL) is in the middle of a key battle between management and hedge fund activist Carl Icahn. if you didn’t think it was best to stay away from this flammable situation, here’s more proof you should.
At the moment, there are tons of metrics shareholders can use to analyze the equity markets. Two of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can outpace their index-focused peers by a healthy amount (see just how much).
Just as useful, optimistic insider trading activity is another way to analyze the world of equities. As the old adage goes: there are many incentives for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).
Thus, let’s analyze the recent info surrounding Dell Inc. (NASDAQ:DELL).
Hedge fund activity in Dell Inc. (NASDAQ:DELL)
Heading into Q3, a total of 56 of the hedge funds we track were long in this stock, a change of -8% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.
According to our 13F database, Icahn Capital LP, managed by Carl Icahn, holds the largest position in Dell Inc. (NASDAQ:DELL). Icahn Capital LP has a $2.0356 billion position in the stock, comprising 9.5% of its 13F portfolio. The second largest stake is held by Mason Hawkins of Southeastern Asset Management, with a $948.6 million position; 4.7% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Jonathon Jacobson’s Highfields Capital Management, Paul Singer’s Elliott Management and Matthew Halbower’s Pentwater Capital Management.
Judging by the fact that Dell Inc. (NASDAQ:DELL) has faced dropping sentiment from the top-tier hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds that elected to cut their entire stakes last quarter. It’s worth mentioning that Frank Brosens’s Taconic Capital dropped the biggest stake of the “upper crust” of funds we key on, totaling an estimated $276.3 million in stock. Kenneth Mario Garschina’s fund, Mason Capital Management, also sold off its stock, about $111 million worth. These moves are important to note, as aggregate hedge fund interest fell by 5 funds last quarter.
Insider trading activity in Dell Inc. (NASDAQ:DELL)
Insider buying made by high-level executives is particularly usable when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Dell Inc. (NASDAQ:DELL) has experienced 3 unique insiders buying, and 1 insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Dell Inc. (NASDAQ:DELL). These stocks are Apple Inc. (NASDAQ:AAPL) and Hewlett-Packard Company (NYSE:HPQ). This group of stocks belong to the personal computers industry and their market caps resemble DELL’s market cap.