Hedge Funds Are Buying LPL Financial Holdings Inc (LPLA)

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Is LPL Financial Holdings Inc (NASDAQ:LPLA) an exceptional stock to buy now? Investors who are in the know are in an optimistic mood. The number of bullish hedge fund positions increased by 1 in recent months.

According to most market participants, hedge funds are assumed to be worthless, outdated investment tools of the past. While there are more than 8000 funds in operation at present, we hone in on the masters of this group, around 450 funds. It is widely believed that this group has its hands on most of the hedge fund industry’s total capital, and by keeping an eye on their top investments, we have formulated a few investment strategies that have historically outperformed the market. 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

LPL Financial Holdings Inc (NASDAQ:LPLA)Just as beneficial, positive insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are plenty of reasons for a bullish insider to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this method if shareholders know where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the key action encompassing LPL Financial Holdings Inc (NASDAQ:LPLA).

Hedge fund activity in LPL Financial Holdings Inc (NASDAQ:LPLA)

In preparation for this quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 8% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.

Of the funds we track, FPR Partners, managed by Bob Peck and Andy Raab, holds the most valuable position in LPL Financial Holdings Inc (NASDAQ:LPLA). FPR Partners has a $241.4 million position in the stock, comprising 11.3% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $59.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Charles Akre’s Akre Capital Management, Robert Pohly’s Samlyn Capital and James A. Noonan’s Pivot Point Capital.

As industrywide interest jumped, some big names have been driving this bullishness. Samlyn Capital, managed by Robert Pohly, assembled the most outsized position in LPL Financial Holdings Inc (NASDAQ:LPLA). Samlyn Capital had 18 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $3.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.

What do corporate executives and insiders think about LPL Financial Holdings Inc (NASDAQ:LPLA)?

Bullish insider trading is best served when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, LPL Financial Holdings Inc (NASDAQ:LPLA) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to LPL Financial Holdings Inc (NASDAQ:LPLA). These stocks are BGC Partners, Inc. (NASDAQ:BGCP), Interactive Brokers Group, Inc. (NASDAQ:IBKR), TD Ameritrade Holding Corp. (NYSE:AMTD), MarketAxess Holdings Inc. (NASDAQ:MKTX), and E TRADE Financial Corporation (NASDAQ:ETFC). This group of stocks are the members of the investment brokerage – national industry and their market caps resemble LPLA’s market cap.

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