American Express Company (AXP) Investors Shouldn’t Exactly Cheer On This Data
American Express Company (NYSE:AXP) is a favorite of Warren Buffett, but how did aggregate hedge fund interest fall last quarter? Here's the reason.
In today’s marketplace, there are a multitude of metrics shareholders can use to track stocks. A duo of the best are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can beat the broader indices by a solid margin (see just how much).
Just as necessary, positive insider trading sentiment is another way to analyze the financial markets. As the old adage goes: there are lots of reasons for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).
Furthermore, let's discuss the latest info for American Express Company (NYSE:AXP).
Hedge fund activity in American Express Company (NYSE:AXP)
At the end of the second quarter, a total of 44 of the hedge funds we track were long in this stock, a change of -6% from the first quarter.
Since American Express Company (NYSE:AXP) has faced declining interest from the entirety of the hedge funds we track, it's easy to see that there were a few fund managers that decided to sell off their positions entirely in Q1. It's worth mentioning that Mario Gabelli's GAMCO Investors cut the biggest investment of the 450+ funds we watch, totaling about $247.9 million in stock. Andrew J. M. Spokes's fund, Farallon Capital, also said goodbye to its stock, about $233.1 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 3 funds in Q1.
Insider trading activity in American Express Company (NYSE:AXP)
Legal insider trading, particularly when it's bullish, is particularly usable when the company in question has experienced transactions within the past six months. Over the last six-month time period, American Express Company (NYSE:AXP) has seen zero unique insiders purchasing, and 12 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 American Express Company (NYSE:AXP). These stocks are CIT Group Inc. (NYSE:CIT), SLM Corp (NASDAQ:SLM), ORIX Corporation (ADR) (NYSE:IX), Discover Financial Services (NYSE:DFS), and Capital One Financial Corp. (NYSE:COF). This group of stocks belong to the credit services industry and their market caps match AXP's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
CIT Group Inc. (NYSE:CIT)
SLM Corp (NASDAQ:SLM)
ORIX Corporation (ADR) (NYSE:IX)
Discover Financial Services (NYSE:DFS)
Capital One Financial Corp. (NYSE:COF)
Using the returns demonstrated by the previously mentioned analyses, regular investors should always track hedge fund and insider trading sentiment, and American Express Company (NYSE:AXP) applies perfectly to this mantra.