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Hedge Funds Are Buying Mastercard Inc (NYSE:MA)

Mastercard Inc (NYSE:MA) investors should be aware of an increase in hedge fund interest recently.

To most traders, hedge funds are seen as slow, old investment vehicles of the past. While there are over 8000 funds trading today, we at Insider Monkey hone in on the top tier of this group, about 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total capital, and by paying attention to their highest performing equity investments, we have unearthed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Mastercard Inc (NYSE:MA)

Equally as important, positive insider trading activity is another way to break down the marketplace. Just as you’d expect, there are many incentives for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).

Now, it’s important to take a look at the recent action surrounding Mastercard Inc (NYSE:MA).

Hedge fund activity in Mastercard Inc (NYSE:MA)

At year’s end, a total of 69 of the hedge funds we track held long positions in this stock, a change of 1% from the third quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, Tom Russo’s Gardner Russo & Gardner had the biggest position in Mastercard Inc (NYSE:MA), worth close to $437 million billion, comprising 6% of its total 13F portfolio. Sitting at the No. 2 spot is Tiger Global Management LLC, managed by Chase Coleman, which held a $327 million position; the fund has 6.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Andreas Halvorsen’s Viking Global, Donald Chiboucis’s Columbus Circle Investors and John Armitage’s Egerton Capital Limited.

Now, specific money managers have been driving this bullishness. JAT Capital Management, managed by John Thaler, assembled the largest position in Mastercard Inc (NYSE:MA). JAT Capital Management had 22 million invested in the company at the end of the quarter. Philippe Laffont’s Coatue Management also initiated a $16 million position during the quarter. The other funds with new positions in the stock are Mark Broach’s Manatuck Hill Partners, Jim Chanos’s Kynikos, and Seymour Sy Kaufman and Michael Stark’s Crosslink Capital.

Insider trading activity in Mastercard Inc (NYSE:MA)

Insider buying is best served when the primary stock in question has seen transactions within the past six months. Over the last 180-day time period, Mastercard Inc (NYSE:MA) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned research, everyday investors must always watch hedge fund and insider trading sentiment, and Mastercard Inc (NYSE:MA) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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