Insomniac Hedge Fund Guy

12 Technology Stocks Hedge Funds Are Insanely Bullish About

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By Insider Monkey

  Insider Monkey, your source for free insider trading data, has started publishing some of its content on Seeking Alpha. Here is the latest article we published about    the most popular stocks among hedge fund managers:

  Based on the transactions of nearly 700 hedge funds, we compiled the list of the top 12 technology stocks hedge funds were buying like crazy during the most recent fourth quarter:

1. Apple Inc (AAPL): Nearly 200 hundred hedge funds own 4% of the outstanding shares. Hedge fund stars like David Einhorn, John Griffin, Stephen Mandel, Chase Coleman and John Burbank all own AAPL in their portfolio.

2. Microsoft Co (MSFT): Microsoft was owned by 161 hedge funds at the end of last year. Barry Rosenstein’s Jana Partners, David Einhorn’s Greenlight Capital, Craig Effron’s Scoggin Capital, and Brevan Howard are some of other hedge funds bullish about Microsoft. Whitney Tilson was extremely bulish about Microsoft too. He predicted that Microsoft will reach $35 by the end of 2011.

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UN: Radiation to Hit U.S. By Friday

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     A United Nations forecast of the potential path of the radioactive plume coming from crippled Japanese reactors shows it churning across the Pacific and touching the Aleutian Islands on Thursday before hitting Southern California late Friday.

     However, the weather (more importantly the wind) has been just as volatile and inconsistent as the markets themselves.  Over the next few days wind will be one of the most important variables being factored into the markets.                 

**  CLICK TO SEE VIDEO OF FORECASTED RADIATION PATH   **

     According to the New York Times, A forecast by the Comprehensive Nuclear Test Ban Treaty Organization shows how weather patterns this

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Escalating Radiation Concerns

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The comments stemming from the EU Energy Commissioner sent the market into a frenzy this morning. Now, the U.S.’s turn, the US Nuclear Chief that is recommending a much larger evacuation radius than Japan has called for. The US Chief has said the three troubled reactors “suffered some degree of core damage.”  Having said that, Japan is keeping a significant amount of intel from the public with regards to the vulnerability of the reactors as well as the current and future radiation concerns.  –For an unbaised live feed from Japan Broadcasting Corp:  NHK Live Video Feed

5 Stocks with Substantial Insider Buying

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By Insider Monkey

Insider trading is most profitable when several insiders buy around the same time. Academic studies have shown that insider purchases beat index funds by more than 7 % per year  when there are several insiders purchasing. Insider Monkey, your source for free insider trading data, compiled the list of stocks where at least two insiders made recent purchases. Here are the stocks with substantial insider purchases:

General Motors (GM): As GM’s stock price fell below its IPO price, several insiders stepped in and purchased modest amounts of shares. Daniel F. Akerson, CEO, purchased 5,000 shares at $31.81. Hedge funds snatched 6% of GM’s outstanding shares and amassed a $3.4 Billion position during the last three months of 2010. There were 112 hedge funds with GM positions at the end of December. John Griffin’s Blue Rigde, William Ackman’s Pershing Square, George Soros, David Tepper’s Appaloosa, Roberto Mignone’s Bridger Management,  Richard Perry’s Perry Capital, and Leon Cooperman’s Omega Advisors are among the several high profile hedge funds with GM positions.

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Japan…The new Black Swan.

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Before the discovery of Australia, people in the Old World were convinced that all swans were white, an unassailable belief as it seemed completely confirmed by empirical evidence. The sighting of the first black swan might have been an interesting surprise for a few ornithologists (and others extremely concerned with the coloring of birds), but that is not where the significance of the story lies. It illustrates a severe limitation to our learning from observations or experience and the fragility of our knowledge. One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans. All you need is one single (and, I am told, quite ugly) black bird.   — Nassim Taleb, The Black Swan: The Impact of the Highly Improbable

 The earthquake, tsunami and current nuclear crisis in Japan, as well as the current geopolitical unrest in the Middle East challenge the concept of market stability. Black Swan events have tested the limits of the financial markets and banking systems for decades (some might recall the “Tulip Mania” bubble in the early 1600’s).  Reflect on the following list, via Doug Kass of those once in a lifetime events that have occured over the past decade:

  • the Sept. 11, 2001, attacks on the World Trade Center and Pentagon;
  • a 75% decline in the Nasdaq;

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We shorted a large amount of S & P ETF

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We shorted a large amount of SPY after hours when we learned of the deteriorating nuclear meltdown problems in Japan.  Unfortunately we didn’t short more.    I’m sorry to say we did this as insurance and really don’t want to make money on this as we are still far more weighted to the long side.  We listened to Robert Kelley on Bloomberg TV who is an intelligent nuclear engineer and he seemed confident that this would be nothing  like Chernobyl. This reassured me but it doesn’t appear to be reassuring the market.  This futures are down 31.7 pts, the largest drop since the Gulf oil spill.  In … Read more

GM and the Japan earthquake disaster present a compelling opportunity

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GM reawakened from the dead and bankrupt went public again at the end of 2010.  It was a heavily subscribed gigantic IPO and the stock did well peaking at around $39 during the first of the year 2011.  It began its descent and recently plunged below 32 on the news of its CFO, Chris Liddell would be leaing the company.  Barron’s reported, ”

Fourteen months after becoming CFO of General Motors (GM), Chris Liddell is leaving the company. He will be replaced on April 1 by Dan Ammann, the company’s senior vice president for finance and treasurer. The company gave no reason for the transition. Shares fell 3.3% in early trading.

Liddell joined GM in January 2010. He had previously been the CFO at Microsoft (MSFT). At GM, he was instrumental in engineering its IPO. He was also praised for strengthening the company’s accounting methods — when it was emerging from bankruptcy, GM acknowledged “material weakness” in some of its statements, but the company’s audit committee said this year that weakness had been fixed, CNNMoney noted.

The company’s statement indicated Ammann had been groomed for this position. Ammann, who is 38, helped Liddell prepare the company’s IPO and has helped set the company’s financial strategy. Prior to joining GM, Ammann was managing director and head of industrials investment banking at Morgan Stanley (MS).

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‘m very curious about this one- Earnings tomorrow

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CEO Brown bought 100,000 shares of this mortage insurer in Nov 2010 at 10.  The media has had lots of play about mortage irregularities and the potential of claims MBI and others might have against the offending banks that created these deficient mortgages.  MBI has also made progress in splitting itself into two businesses, the good one that insures municipal bonds, and the bad one, you know your home, etc. Single family housing has reached levels that don’t support further price destruction as the cost of building is now substantially higher  than the existing housing stock.  On the other hand, the  municipal … Read more

50% in cash now and waiting

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The last couple of days for us have been very frustating.  We were perfectly positioned going into the President’s Day weekend and suffered almost no losses on Tuesday.  I wish we could say we have been that fortunate since.  There has been nonsensical selling.  Alternative energy stocks, such as AMSC go down when oil skyrockets and even natural gas stocks go up?  NLC with 1/3rd of it’s business in the oil sector goes down while oil service stocks go up?   In headline driven markets, technical analysis becomes less useful.  When you lose your compass slow down until you get your bearings.

Oil, Gold, and Market Correction- Should be no surprise to our readers

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Radar Screen Flashing Red Overbought on Multiple=If you will search on our posts, you will see we suggested buying the USO (that’s the most popular ETF tracking crude oil), several of the largest gold miners, and lastly we have repeatedly warned of a toppy market. Now you might say we have been lucky, that the Mideast democracy contagion has worked in our favor

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NLC shows a good setup at 27

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Remember the company that supplied all the dispersant from the Gulf oil spill.  Well Nalco, NLC is an interesting company that has been on a bull run.  It pulled back after this quarter’s earnings.  Insiders must think the future is rosy as two of them stepped up with significant buys.  Take a look at the chart.  Insider buying and bullish RSI divergence in price action suggests this stock is about to turn up.

If you had any doubts how actionable and good these ideas are, look at our last post on Dell and Visa

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We don’t like people gloating but we do like to help people make money.  We wrote about both Dell and Visa as our largest year end positions.  Both have done very well for our investors.  We are mostly out of Visa now but continue to hold Dell.  We will buy Visa back though on any pullback.  Dell is so grossly undervalued as to be ludicrous.

Companies on the Move in Emerging Markets

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This is a great report I found on the web about rising stars in emerging markets.  The Boston Consulting Group did an excellent job as usual in ferreting out this information.   The BCG is a global management consulting firm and according to them the world’s leading adviser on business strategy.  I did work with them while I was CEO at HomeCom and they were first rate. You can find the report here.

If you knew your stock was going down tomorrow would you sell it today?

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Everyday before the market opens, I put a plus sign, minus sign or zero sign in front of every stock symbol I own.  The plus sign signifies that I think the stock goes up today, the minus is down, and the zero sign is I don’t have a clue.  I keep these sheets for several days comparing my predictions to the actual results.  The cost of transactions is so miniscule that if I have a high confidence level that a stock is going down, I have to ask myself can I own this stock cheaper tomorrow.  If so, why do … Read more

One piece of news trumps charts

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Some chartists believe that all known events are already reflected in the price patterns in the chart. They spend a lot of time trying to divine MA crossovers, MACD, Stochastics, Resistance Support lines and many more technical indicators. I too believe strongly in technical analysis but of course equally strongly that one piece of news trumps charts. This chart of Dolby is a a perfect example of this. The company looked like it was poised for a bounce. It was oversold, the RSI was diverging clearly heading in a positive direction while the price action was settling out. Then came … Read more

The technical edge – Gold is making a turn, the counter trend

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Gold is in a downtrend. If you look at the chart you will see the double top with multiple red divergence paints showing before it rolled over. Now it’s flashing divergence in the trend and set for a rebound. The news in Egypt should put a temporary psychological kick in the price too. Longer term the events in Egypt could be remarkably bullish for emerging markets. A friendly Arab democracy would be quite wonderful along the lines of the falling of the Berlin Wall. Who’s going to pick up that tab though? The Chinese?

SODA what a pop!

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This is a repeat of a prior post. I only wish I had listened to my own advice as we made so much money on this trade we didn’t keep enough of a tail. We have a small but exciting position in an Israeli based company, SodaStream International, Inc. You basically buy their product and make your own sodas and carbonated water. It’s a classic razor and razor blade model. They recently targeted the underserved US market and had an IPO in November. The stock nearly doubled from its initial public offering price of 20 but has pulled back recently … Read more