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Hedge Funds Are Betting On Heartland Payment Systems, Inc. (HPY)

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Is Heartland Payment Systems, Inc. (NYSE:HPY) an attractive investment today? Prominent investors are in a bullish mood. The number of long hedge fund bets advanced by 7 lately.

Heartland Payment Systems, Inc. (NYSE:HPY)In the eyes of most stock holders, hedge funds are viewed as worthless, outdated financial tools of the past. While there are more than 8000 funds with their doors open today, we choose to focus on the moguls of this club, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by tracking their top stock picks, we have identified a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as integral, positive insider trading sentiment is another way to break down the marketplace. There are a number of incentives for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if you know what to do (learn more here).

Consequently, it’s important to take a gander at the recent action encompassing Heartland Payment Systems, Inc. (NYSE:HPY).

Hedge fund activity in Heartland Payment Systems, Inc. (NYSE:HPY)

At Q1’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of 58% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

When looking at the hedgies we track, Brian Taylor’s Pine River Capital Management had the biggest position in Heartland Payment Systems, Inc. (NYSE:HPY), worth close to $24.1 million, comprising 0.5% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $17.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Malcolm Fairbairn’s Ascend Capital, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the most valuable position in Heartland Payment Systems, Inc. (NYSE:HPY). Renaissance Technologies had 3.8 million invested in the company at the end of the quarter. SAC Subsidiary’s Sigma Capital Management also made a $3.3 million investment in the stock during the quarter. The other funds with brand new HPY positions are Matthew Tewksbury’s Stevens Capital Management, Glenn Russell Dubin’s Highbridge Capital Management, and Spencer M. Waxman’s Shannon River Fund Management.

What do corporate executives and insiders think about Heartland Payment Systems, Inc. (NYSE:HPY)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, Heartland Payment Systems, Inc. (NYSE:HPY) has experienced 1 unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Heartland Payment Systems, Inc. (NYSE:HPY). These stocks are VistaPrint Limited (NASDAQ:VPRT), Atlas Resource Partners, L.P. (NYSE:ARP), Interval Leisure Group, Inc. (NASDAQ:IILG), Cardtronics, Inc. (NASDAQ:CATM), and ABM Industries, Inc. (NYSE:ABM). This group of stocks are the members of the business services industry and their market caps resemble HPY’s market cap.

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