Bank of America Corp (BAC) Hedge Fund Data Is Mixed: What It Means For You
Bank of America Corp (NYSE:BAC) stock is up over 20% year-to-date, but hedge funds and insiders are mixed. Some of the biggest BAC backers in the hedge fund world dropped the stock of late, but is it just profit-taking, or is it something more?
At the moment, there are a multitude of gauges investors can use to monitor Mr. Market. Some of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a significant amount (see just how much).
Just as necessary, positive insider trading activity is another way to analyze the financial markets. As the old adage goes: there are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).
What's more, we're going to analyze the newest info surrounding Bank of America Corp (NYSE:BAC).
Hedge fund activity in Bank of America Corp (NYSE:BAC)
In preparation for the third quarter, a total of 85 of the hedge funds we track were long in this stock, a change of -9% from the first quarter. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their stakes considerably.
When using filings from the hedgies we track, Bruce Berkowitz's Fairholme (FAIRX) had the most valuable position in Bank of America Corp (NYSE:BAC), worth close to $1.2982 billion, comprising 16.9% of its total 13F portfolio. On Fairholme (FAIRX)'s heels is Natixis Global Asset Management of Harris Associates, with a $988.9 million position; 2.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Kerr Neilson's Platinum Asset Management, Richard S. Pzena's Pzena Investment Management and Ken Fisher's Fisher Asset Management.
Because Bank of America Corp (NYSE:BAC) has experienced a fall in interest from upper-tier hedge fund managers, we can see that there exists a select few money managers that slashed their full holdings last quarter. It's worth mentioning that Louis Bacon's Moore Global Investments sold off the biggest stake of all the hedgies we key on, valued at about $122.6 million in stock, and Charles de Vaulx of International Value Advisers was right behind this move, as the fund dropped about $103.3 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 8 funds last quarter.
What have insiders been doing with Bank of America Corp (NYSE:BAC)?
Insider buying is best served when the company in question has experienced transactions within the past half-year. Over the latest 180-day time period, Bank of America Corp (NYSE:BAC) has seen 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to Bank of America Corp (NYSE:BAC). These stocks are Toronto-Dominion Bank (USA) (NYSE:TD), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), Wells Fargo & Co (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C). This group of stocks belong to the money center banks industry and their market caps resemble BAC's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Toronto-Dominion Bank (USA) (NYSE:TD)
Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU)
Wells Fargo & Co (NYSE:WFC)
JPMorgan Chase & Co. (NYSE:JPM)
Citigroup Inc. (NYSE:C)
Using the returns explained by our research, regular investors must always pay attention to hedge fund and insider trading activity, and Bank of America Corp (NYSE:BAC) is an important part of this process.