Is FTI Consulting, Inc. (NYSE:FCN) a superb investment today? The best stock pickers are becoming less hopeful. The number of bullish hedge fund bets retreated by 2 lately.
In the eyes of most investors, hedge funds are viewed as worthless, old financial vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we hone in on the moguls of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total capital, and by monitoring their highest performing picks, we have found 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 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 23.3 percentage points in 8 months (explore the details and some picks here).
Just as important, bullish insider trading sentiment is a second way to parse down the world of equities. There are lots of incentives for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
Keeping this in mind, we’re going to take a look at the recent action regarding FTI Consulting, Inc. (NYSE:FCN).
How are hedge funds trading FTI Consulting, Inc. (NYSE:FCN)?
At the end of the first quarter, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably.
Of the funds we track, Wallace R. Weitz & Co., managed by Wallace Weitz, holds the most valuable position in FTI Consulting, Inc. (NYSE:FCN). Wallace R. Weitz & Co. has a $6.7 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $3.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that are bullish include Matthew Hulsizer’s PEAK6 Capital Management, Ken Griffin’s Citadel Investment Group and Boaz Weinstein’s Saba Capital.
Because FTI Consulting, Inc. (NYSE:FCN) has experienced bearish sentiment from the smart money, we can see that there was a specific group of hedgies who sold off their full holdings in Q1. At the top of the heap, Timothy S. Peterson’s Regiment Capital cut the largest stake of the 450+ funds we key on, totaling close to $23.6 million in stock.. Chuck Royce’s fund, Royce & Associates, also dropped its stock, about $6.4 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds in Q1.
What do corporate executives and insiders think about FTI Consulting, Inc. (NYSE:FCN)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time period, FTI Consulting, Inc. (NYSE:FCN) has seen zero unique insiders purchasing, and 1 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 FTI Consulting, Inc. (NYSE:FCN). These stocks are Wageworks Inc (NYSE:WAGE), Huron Consulting Group (NASDAQ:HURN), Accretive Health, Inc. (NYSE:AH), The Corporate Executive Board Company (NYSE:CEB), and Booz Allen Hamilton Holding Corporation (NYSE:BAH). This group of stocks are in the management services industry and their market caps are similar to FCN’s market cap.