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Hedge Funds Are Crazy About IntercontinentalExchange Inc (NYSE:ICE)

IntercontinentalExchange Inc (NYSE:ICE) was in 31 hedge funds’ portfolio at the end of the fourth quarter of 2012. ICE investors should pay attention to an increase in enthusiasm from smart money of late. There were 21 hedge funds in our database with ICE positions at the end of the previous quarter.

IntercontinentalExchange Inc NYSE:ICE

In today’s marketplace, there are tons of gauges shareholders can use to track the equity markets. Some of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can beat their index-focused peers by a solid amount (see just how much).

Equally as key, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are lots of incentives for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).

Keeping this in mind, we’re going to take a look at the recent action surrounding IntercontinentalExchange Inc (NYSE:ICE).

Hedge fund activity in IntercontinentalExchange Inc (NYSE:ICE)

In preparation for this year, a total of 31 of the hedge funds we track held long positions in this stock, a change of 48% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.

Of the funds we track, Senator Investment Group, managed by Doug Silverman, holds the biggest position in IntercontinentalExchange Inc (NYSE:ICE). Senator Investment Group has a $220 million position in the stock, comprising 4.8% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $174 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other peers that are bullish include Jonathon Jacobson’s Highfields Capital Management, Robert Pohly’s Samlyn Capital and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the heavyweights, key money managers have jumped into IntercontinentalExchange Inc (NYSE:ICE) headfirst. Senator Investment Group, managed by Doug Silverman, assembled the biggest position in IntercontinentalExchange Inc (NYSE:ICE). Senator Investment Group had 220 million invested in the company at the end of the quarter. Jonathon Jacobson’s Highfields Capital Management also initiated a $141 million position during the quarter. The other funds with brand new ICE positions are Robert Pohly’s Samlyn Capital, Brian Taylor’s Pine River Capital Management, and Brian Taylor’s Pine River Capital Management.

What have insiders been doing with IntercontinentalExchange Inc (NYSE:ICE)?

Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time frame, IntercontinentalExchange Inc (NYSE:ICE) has seen zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

With the results shown by our research, retail investors should always monitor hedge fund and insider trading activity, and IntercontinentalExchange Inc (NYSE:ICE) 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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