Is Convergys Corporation (NYSE:CVG) a bargain? The best stock pickers are becoming less confident. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
In the financial world, there are a multitude of methods investors can use to monitor stocks. Two of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a solid margin (see just how much).
Just as integral, optimistic insider trading sentiment is a second way to break down the stock market universe. There are many motivations for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).
Now, we’re going to take a glance at the recent action encompassing Convergys Corporation (NYSE:CVG).
What does the smart money think about Convergys Corporation (NYSE:CVG)?
In preparation for this year, a total of 11 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Convergys Corporation (NYSE:CVG). Royce & Associates has a $85 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Cardinal Capital, managed by Amy Minella, which held a $47 million position; the fund has 3.2% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Barry Rosenstein’s JANA Partners.
Since Convergys Corporation (NYSE:CVG) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds that decided to sell off their positions entirely heading into 2013. At the top of the heap, Mike Vranos’s Ellington said goodbye to the largest stake of the “upper crust” of funds we track, worth close to $0 million in stock. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Convergys Corporation (NYSE:CVG)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Convergys Corporation (NYSE:CVG) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Convergys Corporation (NYSE:CVG). These stocks are SS and C Technologies Holdings Inc (NASDAQ:SSNC), Qlik Technologies Inc (NASDAQ:QLIK), Guidewire Software Inc (NYSE:GWRE), Sapient Corporation (NASDAQ:SAPE), and Verint Systems Inc. (NASDAQ:VRNT). This group of stocks belong to the business software & services industry and their market caps are similar to CVG’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|SS and C Technologies Holdings Inc (NASDAQ:SSNC)||6||0||4|
|Qlik Technologies Inc (NASDAQ:QLIK)||18||0||6|
|Guidewire Software Inc (NYSE:GWRE)||9||1||9|
|Sapient Corporation (NASDAQ:SAPE)||16||0||6|
|Verint Systems Inc. (NASDAQ:VRNT)||18||0||3|
With the returns shown by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Convergys Corporation (NYSE:CVG) shareholders fit into this picture quite nicely.
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