The Advisory Board Company (NASDAQ:ABCO) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.
According to most stock holders, hedge funds are assumed to be slow, old investment tools of years past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the leaders of this club, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total asset base, and by keeping an eye on their best stock picks, we have uncovered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as beneficial, bullish insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are lots of stimuli for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).
Now, we’re going to take a glance at the latest action surrounding The Advisory Board Company (NASDAQ:ABCO).
Hedge fund activity in The Advisory Board Company (NASDAQ:ABCO)
At year’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in The Advisory Board Company (NASDAQ:ABCO). Royce & Associates has a $78 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $17 million position; the fund has 0% of its 13F portfolio invested in the stock. Other peers that are bullish include Brian Bares’s Bares Capital Management, Mike Vranos’s Ellington and Steven Cohen’s SAC Capital Advisors.
Due to the fact that The Advisory Board Company (NASDAQ:ABCO) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there were a few hedge funds that slashed their entire stakes last quarter. It’s worth mentioning that Brian Ashford-Russell and Tim Woolley’s Polar Capital cut the biggest investment of the “upper crust” of funds we monitor, totaling close to $5 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund dropped about $4 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds last quarter.
Insider trading activity in The Advisory Board Company (NASDAQ:ABCO)
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time period, The Advisory Board Company (NASDAQ:ABCO) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to The Advisory Board Company (NASDAQ:ABCO). These stocks are Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), Deluxe Corporation (NYSE:DLX), Fair Isaac Corporation (NYSE:FICO), Healthcare Services Group, Inc. (NASDAQ:HCSG), and Zillow Inc (NASDAQ:Z). This group of stocks are in the business services industry and their market caps are closest to ABCO’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Portfolio Recovery Associates, Inc. (NASDAQ:PRAA)||4||0||8|
|Deluxe Corporation (NYSE:DLX)||8||0||6|
|Fair Isaac Corporation (NYSE:FICO)||11||0||7|
|Healthcare Services Group, Inc. (NASDAQ:HCSG)||7||0||3|
|Zillow Inc (NASDAQ:Z)||10||0||9|
With the results exhibited by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and The Advisory Board Company (NASDAQ:ABCO) is no exception.