Selling European Stocks: Why Some Hedge Funds Are Doing Just Fine

(List compiled by Becca Lipman)

Although most hedge funds have operated at a loss this year, it’s those that have defensively positioned themselves and constantly pulled deals on and off the table that ultimately pulled a profit.

Brian McCarthy, founding director of Alder Capita says it best in an interview with Reuters, “If you had the same positions on now that you had at the start of the month you’d be in a right mess.”

There have been few profitable centrally themes portfolios and long-positions. Sources of short-positions profit have largely been silver and gold, exchange rates, and shorting European banks.

Looking to also cash in by shorting the global debt crisis?

As far as hedge funds see it, Greece is old news, and now it’s onto the runner ups, including France, Italy, and Spain.

“Anecdotal evidence suggests managers have moved away from bets on CDS (credit default swaps) on countries such as Greece, Portugal and Ireland, and are now betting on the next tier of countries, such as Italy, or on countries like France whose CDS are already moving on worries over the euro zone’s problems.” (via Reuters)

To help you dig further into the European market, we’ve listed below the European stocks that have seen that most significant institutional selling over the current quarter.

What do you think, are hedge funds making the right call?

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List sorted by institutional selling as a % of share float.

1. Tyco Electronics, Ltd. (TEL): Diversified Electronics Industry. Market cap of $13.21B. Current price at $30.49. Net institutional sold 155.7M shares, which is 36.01% of the company’s 432.40M share float. The stock is currently stuck in a downtrend, trading -13.19% below its SMA20, -14.15% below its SMA50, and -12.28% below its SMA200. It’s been a rough couple of days for the stock, losing 11.44% over the last week.

2. Covidien plc (COV): Medical Instruments & Supplies Industry. Market cap of $22.99B. Current price at $46.37. Net institutional sold 119.1M shares, which is 24.37% of the company’s 488.76M share float. The stock is currently stuck in a downtrend, trading -9.42% below its SMA20, -11.84% below its SMA50, and -6.15% below its SMA200. It’s been a rough couple of days for the stock, losing 8.7% over the last week.

3. Seagate Technology PLC (STX): Data Storage Devices Industry. Market cap of $5.19B. Current price at $12.06. Net institutional sold 40.0M shares, which is 10.01% of the company’s 399.48M share float. Offers a good dividend, and appears to have good liquidity to back it up–dividend yield at 5.97%, current ratio at 1.86, and quick ratio at 1.6. The stock is currently stuck in a downtrend, trading -19.51% below its SMA20, -20.98% below its SMA50, and -18.03% below its SMA200. It’s been a rough couple of days for the stock, losing 11.97% over the last week.

4. Logitech International SA (LOGI): Computer Peripherals Industry. Market cap of $1.69B. Current price at $8.8. Net institutional sold 15.3M shares, which is 9.14% of the company’s 167.46M share float. Might be undervalued at current levels, with a PEG ratio at 0.91, and P/FCF ratio at 14.85. The stock is a short squeeze candidate, with a short float at 8.01% (equivalent to 8.98 days of average volume). It’s been a rough couple of days for the stock, losing 8.33% over the last week.

5. Grupo Prisa SA (PRIS): Entertainment Industry. Market cap of $1.42B. Current price at $6.75. Net institutional sold 9.9M shares, which is 7.34% of the company’s 134.91M share float. The stock is currently stuck in a downtrend, trading -19.37% below its SMA20, -22.88% below its SMA50, and -31.55% below its SMA200. It’s been a rough couple of days for the stock, losing 17.48% over the last week.

6. Weatherford International Ltd. (WFT): Oil & Gas Equipment & Services Industry. Market cap of $13.59B. Current price at $18.2. Net institutional sold 54.2M shares, which is 7.31% of the company’s 741.94M share float. It’s been a rough couple of days for the stock, losing 16.97% over the last week.

7. ASM International NV (ASMI): Semiconductor Equipment & Materials Industry. Market cap of $1.34B. Current price at $24.75. Net institutional sold 2.8M shares, which is 6.38% of the company’s 43.89M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.38). The stock is currently stuck in a downtrend, trading -19.84% below its SMA20, -30.67% below its SMA50, and -29.22% below its SMA200. It’s been a rough couple of days for the stock, losing 15.01% over the last week.

8. LyondellBasell Industries NV (LYB): Specialty Chemicals Industry. Market cap of $18.77B. Current price at $33.11. Net institutional sold -20.1M shares, which is 5.45% of the company’s 369.10M share float. The stock is currently stuck in a downtrend, trading -13.23% below its SMA20, -14.82% below its SMA50, and -9.35% below its SMA200. It’s been a rough couple of days for the stock, losing 16.09% over the last week.

9. Autoliv, Inc. (ALV): Auto Parts Industry. Market cap of $4.98B. Current price at $55.82. Net institutional sold -4.7M shares, which is 5.29% of the company’s 88.83M share float. The stock is currently stuck in a downtrend, trading -16.91% below its SMA20, -21.92% below its SMA50, and -24.84% below its SMA200. It’s been a rough couple of days for the stock, losing 15.63% over the last week.

10. Tsakos Energy Navigation Ltd. (TNP): Shipping Industry. Market cap of $323.02M. Current price at $7.01. Net institutional sold -1.7M shares, which is 5.11% of the company’s 33.26M share float. The stock is currently stuck in a downtrend, trading -22.71% below its SMA20, -26.71% below its SMA50, and -28.18% below its SMA200. It’s been a rough couple of days for the stock, losing 21.32% over the last week.

Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


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