Is Wells Fargo & Co (NYSE:WFC) going to take off soon? Investors who are in the know are in a bearish mood. The number of long hedge fund positions shrunk by 7 in recent months.
In the financial world, there are plenty of gauges shareholders can use to track their holdings. A couple of the most underrated 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 best hedge fund managers can outperform their index-focused peers by a very impressive margin (see just how much).
Equally as integral, bullish insider trading activity is a second way to parse down the world of equities. Obviously, there are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the recent action encompassing Wells Fargo & Co (NYSE:WFC).
Hedge fund activity in Wells Fargo & Co (NYSE:WFC)
At Q1’s end, a total of 78 of the hedge funds we track were long in this stock, a change of -8% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.
Since Wells Fargo & Co (NYSE:WFC) has witnessed falling interest from hedge fund managers, it’s safe to say that there were a few funds who were dropping their entire stakes in Q1. At the top of the heap, Patrick Degorce’s Theleme Partners sold off the largest stake of the “upper crust” of funds we key on, comprising an estimated $64.9 million in call options, and Louis Bacon of Moore Global Investments was right behind this move, as the fund dropped about $64.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 7 funds in Q1.
Insider trading activity in Wells Fargo & Co (NYSE:WFC)
Insider buying is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time frame, Wells Fargo & Co (NYSE:WFC) has seen zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and Wells Fargo & Co (NYSE:WFC) is an important part of this process.