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Do Hedge Funds and Insiders Love DigitalGlobe Inc (DGI)?

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If you were to ask many investors, hedge funds are seen as delayed, old financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open today, this site aim at the crème de la crème of this club, close to 525 funds. It is assumed that this group oversees the majority of all hedge funds’ total capital, and by keeping an eye on their highest quality picks, we’ve figured out a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as useful, bullish insider trading sentiment is another way to analyze the world of equities. Obviously, there are many incentives for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).

Thus, let’s study the newest info about DigitalGlobe Inc (NYSE:DGI).

What have hedge funds been doing with DigitalGlobe Inc (NYSE:DGI)?

Heading into Q3, a total of 33 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly.

DigitalGlobe Inc (NYSE:DGI)Out of the hedge funds we follow, James Dinan’s York Capital Management had the most valuable position in DigitalGlobe Inc (NYSE:DGI), worth close to $83.7 million, comprising 1.7% of its total 13F portfolio. Sitting at the No. 2 spot is Cerberus Capital Management, managed by Stephen Feinberg, which held a $75.3 million position; the fund has 15.9% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Peter Adam Hochfelder’s Brahman Capital, Mariko Gordon’s Daruma Asset Management and D. E. Shaw’s D E Shaw.

Judging by the fact that DigitalGlobe Inc (NYSE:DGI) has witnessed a fall in interest from the smart money’s best and brightest, it’s safe to say that there exists a select few fund managers that decided to sell off their entire stakes last quarter. At the top of the heap, Brian Jackelow’s SAB Capital Management dumped the largest position of all the hedgies we key on, worth about $134.7 million in stock. James Dondero’s fund, Highland Capital Management, also dumped its stock, about $14 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with DigitalGlobe Inc (NYSE:DGI)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the company in focus has seen transactions within the past six months. Over the last 180-day time frame, DigitalGlobe Inc (NYSE:DGI) has seen zero unique insiders buying, and zero 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 DigitalGlobe Inc (NYSE:DGI). These stocks are FactSet Research Systems Inc. (NYSE:FDS), Dun & Bradstreet Corp (NYSE:DNB), Morningstar, Inc. (NASDAQ:MORN), DST Systems, Inc. (NYSE:DST), and Broadridge Financial Solutions, Inc. (NYSE:BR). All of these stocks are in the information & delivery services industry and their market caps match DGI’s market cap.

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