Discover Financial Services (NYSE:DFS) investors have a plethora of indicators at their collective disposal. We’ll give you one you might not have seen yet.
In today’s marketplace, there are tons of methods investors can use to analyze the equity markets. Two of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can trounce their index-focused peers by a significant amount (see just how much).
Equally as useful, optimistic insider trading sentiment is another way to analyze the stock market universe. As the old adage goes: there are lots of stimuli for an insider to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if you understand where to look (learn more here).
Furthermore, we’re going to analyze the recent info surrounding Discover Financial Services (NYSE:DFS).
How are hedge funds trading Discover Financial Services (NYSE:DFS)?
Heading into Q3, a total of 47 of the hedge funds we track were bullish in this stock, a change of 2% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially.
Out of the hedge funds we follow, Ken Griffin’s Citadel Investment Group had the biggest position in Discover Financial Services (NYSE:DFS), worth close to $278.1 million, accounting for 0.5% of its total 13F portfolio. Coming in second is Columbus Circle Investors, managed by Donald Chiboucis, which held a $241.7 million position; 1.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Rob Citrone’s Discovery Capital Management, Daniel S. Och’s OZ Management and Cliff Asness’s AQR Capital Management.
Now, certain money managers have jumped into Discover Financial Services (NYSE:DFS) headfirst. Citadel Investment Group, managed by Ken Griffin, established the most outsized position in Discover Financial Services (NYSE:DFS). Citadel Investment Group had 278.1 million invested in the company at the end of the quarter. Donald Chiboucis’s Columbus Circle Investors also initiated a $241.7 million position during the quarter. The other funds with brand new DFS positions are Rob Citrone’s Discovery Capital Management, Daniel S. Och’s OZ Management, and Cliff Asness’s AQR Capital Management.
How are insiders trading Discover Financial Services (NYSE:DFS)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past six months. Over the latest 180-day time frame, Discover Financial Services (NYSE:DFS) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Discover Financial Services (NYSE:DFS). These stocks are The Western Union Company (NYSE:WU), CIT Group Inc. (NYSE:CIT), SLM Corp (NASDAQ:SLM), ORIX Corporation (ADR) (NYSE:IX), and Capital One Financial Corp. (NYSE:COF). This group of stocks are in the credit services industry and their market caps match DFS’s market cap.