Global Payments Inc (NYSE:GPN) investors should pay attention to an increase in hedge fund interest in recent months.
According to most stock holders, hedge funds are seen as worthless, old financial vehicles of years past. While there are over 8000 funds in operation at the moment, we choose to focus on the bigwigs of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by tracking their best stock picks, we have unsheathed a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, bullish insider trading activity is another way to parse down the world of equities. As the old adage goes: there are a variety of reasons for an insider to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the key action surrounding Global Payments Inc (NYSE:GPN).
What have hedge funds been doing with Global Payments Inc (NYSE:GPN)?
Heading into 2013, a total of 26 of the hedge funds we track were long in this stock, a change of 8% from the third quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Fir Tree, managed by Jeffrey Tannenbaum, holds the largest position in Global Payments Inc (NYSE:GPN). Fir Tree has a $108 million position in the stock, comprising 2.8% of its 13F portfolio. Coming in second is Brian Taylor of Pine River Capital Management, with a $28 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Amy Minella’s Cardinal Capital, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
Consequently, key hedge funds were leading the bulls’ herd. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the most valuable position in Global Payments Inc (NYSE:GPN). Highbridge Capital Management had 9 million invested in the company at the end of the quarter. Perella Weinberg Partners also made a $3 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Israel Englander’s Catapult Capital Management, and Lisa Rapuano’s Lane Five Capital.
How have insiders been trading Global Payments Inc (NYSE:GPN)?
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past six months. Over the last six-month time period, Global Payments Inc (NYSE:GPN) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the returns exhibited by our strategies, retail investors must always monitor hedge fund and insider trading activity, and Global Payments Inc (NYSE:GPN) shareholders fit into this picture quite nicely.
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