Is CIT Group Inc. (NYSE:CIT) a sell? Hedge funds sure think so,
At the moment, there are tons of metrics shareholders can use to monitor publicly traded companies. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outclass the market by a solid margin (see just how much).
Equally as necessary, positive insider trading activity is another way to look at the world of equities. As the old adage goes: there are a number of motivations for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).
What's more, it's important to analyze the recent info surrounding CIT Group Inc. (NYSE:CIT).
In preparation for the third quarter, a total of 39 of the hedge funds we track held long positions in this stock, a change of -15% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
According to our 13F database, Centerbridge Partners, managed by Mark T. Gallogly, holds the biggest position in CIT Group Inc. (NYSE:CIT). Centerbridge Partners has a $412.5 million position in the stock, comprising 41.3% of its 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $172.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include John A. Levin's Levin Capital Strategies, Robert Rodriguez and Steven Romick's First Pacific Advisors LLC and Ken Griffin's Citadel Investment Group.
Judging by the fact that CIT Group Inc. (NYSE:CIT) has witnessed a fall in interest from the entirety of the hedge funds we track, it's safe to say that there exists a select few funds that decided to sell off their positions entirely last quarter. Interestingly, Thomas Ellis and Todd Hammer's North Run Capital sold off the largest investment of all the hedgies we monitor, totaling close to $43.5 million in stock. Richard Rubin's fund, Hawkeye Capital, also dropped its stock, about $21.9 million worth. These transactions are interesting, as total hedge fund interest fell by 7 funds last quarter.
Insider buying made by high-level executives is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last half-year time frame, CIT Group Inc. (NYSE:CIT) has experienced zero unique insiders buying, and zero 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 CIT Group Inc. (NYSE:CIT). These stocks are Discover Financial Services (NYSE:DFS), ORIX Corporation (ADR) (NYSE:IX), Equifax Inc. (NYSE:EFX), SLM Corp (NASDAQ:SLM), and The Western Union Company (NYSE:WU). This group of stocks belong to the credit services industry and their market caps are similar to CIT's market cap.