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Do Hedge Funds and Insiders Love Valassis Communications, Inc. (VCI)?

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In the eyes of many market players, hedge funds are seen as bloated, outdated investment tools of a period lost to current times. Although there are more than 8,000 hedge funds in operation today, this site focuses on the moguls of this group, around 525 funds. It is widely held that this group controls the majority of all hedge funds’ total assets, and by paying attention to their highest performing picks, we’ve figured out a number of 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 annually 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 outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as crucial, optimistic insider trading sentiment is a second way to analyze the stock market universe. As the old adage goes: there are many incentives for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand where to look (learn more here).

Now that that’s out of the way, let’s examine the newest info about Valassis Communications, Inc. (NYSE:VCI).

What have hedge funds been doing with Valassis Communications, Inc. (NYSE:VCI)?

Heading into Q3, a total of 18 of the hedge funds we track were long in this stock, a change of 20% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.

Valassis Communications, Inc. (NYSE:VCI)Out of the hedge funds we follow, Richard S. Pzena’s Pzena Investment Management had the most valuable position in Valassis Communications, Inc. (NYSE:VCI), worth close to $41.1 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $8.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and David Dreman’s Dreman Value Management.

As aggregate interest spiked, certain money managers have been driving this bullishness. Pzena Investment Management, managed by Richard S. Pzena, assembled the most valuable position in Valassis Communications, Inc. (NYSE:VCI). Pzena Investment Management had 41.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $8.5 million position during the quarter. The other funds with brand new VCI positions are Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management, and David Dreman’s Dreman Value Management.

What have insiders been doing with Valassis Communications, Inc. (NYSE:VCI)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time period, Valassis Communications, Inc. (NYSE:VCI) 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 Valassis Communications, Inc. (NYSE:VCI). These stocks are Millennial Media, Inc. (NYSE:MM), MDC Partners Inc. (USA) (NASDAQ:MDCA), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), National CineMedia, Inc. (NASDAQ:NCMI), and Arbitron Inc. (NYSE:ARB). This group of stocks are the members of the marketing services industry and their market caps are similar to VCI’s market cap.

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