What should smart VeriFone Systems Inc (NYSE:PAY) investors be doing?
To the average investor, there are dozens of methods investors can use to track the equity markets. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can beat their index-focused peers by a very impressive margin (see just how much).
Just as key, positive insider trading activity is another way to analyze the marketplace. As the old adage goes: there are a number of reasons for an executive to downsize shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this method if shareholders understand where to look (learn more here).
What's more, let's discuss the recent info about VeriFone Systems Inc (NYSE:PAY).
Heading into Q3, a total of 17 of the hedge funds we track held long positions in this stock, a change of -11% from one quarter earlier. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes substantially.
Out of the hedge funds we follow, Rob Citrone's Discovery Capital Management had the biggest position in VeriFone Systems Inc (NYSE:PAY), worth close to $44.3 million, comprising 0.5% of its total 13F portfolio. The second largest stake is held by Tiger Consumer Management, managed by Patrick McCormack, which held a $38.2 million position; 1.3% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Michael Doheny's Freshford Capital Management, Ken Griffin's Citadel Investment Group and Peter S. Park's Park West Asset Management.
Due to the fact VeriFone Systems Inc (NYSE:PAY) has experienced a fall in interest from the smart money's best and brightest, it's easy to see that there exists a select few funds that slashed their entire stakes last quarter. It's worth mentioning that Paul Singer's Elliott Management cut the largest stake of all the hedgies we watch, totaling an estimated $60.1 million in stock. SAC Subsidiary's fund, Sigma Capital Management, also sold off its stock, about $15.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.
Insider buying is at its handiest when the company in question has experienced transactions within the past half-year. Over the last half-year time period, VeriFone Systems Inc (NYSE:PAY) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to VeriFone Systems Inc (NYSE:PAY). These stocks are Knoll Inc (NYSE:KNL), HNI Corp (NYSE:HNI), Herman Miller, Inc. (NASDAQ:MLHR), Pitney Bowes Inc. (NYSE:PBI), and Steelcase Inc. (NYSE:SCS). All of these stocks are in the business equipment industry and their market caps are similar to PAY's market cap.