Is FactSet Research Systems Inc. (NYSE:FDS) a bargain? The best stock pickers are getting less bullish. The number of bullish hedge fund bets decreased by 1 lately.
To most investors, hedge funds are seen as worthless, outdated financial vehicles of the past. While there are more than 8000 funds in operation at present, we choose to focus on the moguls of this group, close to 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total asset base, and by watching their best picks, we have formulated a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, bullish insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are lots of incentives for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).
With all of this in mind, let’s take a gander at the key action encompassing FactSet Research Systems Inc. (NYSE:FDS).
How have hedgies been trading FactSet Research Systems Inc. (NYSE:FDS)?
At the end of the fourth quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -9% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in FactSet Research Systems Inc. (NYSE:FDS). Renaissance Technologies has a $72.9 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is David Blood and Al Gore of Generation Investment Management, with a $63 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Ken Griffin’s Citadel Investment Group, Charles Akre’s Akre Capital Management and Chuck Royce’s Royce & Associates.
Seeing as FactSet Research Systems Inc. (NYSE:FDS) has witnessed a declination in interest from hedge fund managers, it’s safe to say that there were a few money managers that elected to cut their entire stakes heading into 2013. Interestingly, Israel Englander’s Millennium Management sold off the largest position of the “upper crust” of funds we track, comprising close to $5.3 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund dumped about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds heading into 2013.
How have insiders been trading FactSet Research Systems Inc. (NYSE:FDS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, FactSet Research Systems Inc. (NYSE:FDS) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to FactSet Research Systems Inc. (NYSE:FDS). These stocks are IHS Inc. (NYSE:IHS), Broadridge Financial Solutions, Inc. (NYSE:BR), DST Systems, Inc. (NYSE:DST), Morningstar, Inc. (NASDAQ:MORN), and Dun & Bradstreet Corp (NYSE:DNB). All of these stocks are in the information & delivery services industry and their market caps resemble FDS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|IHS Inc. (NYSE:IHS)||8||2||10|
|Broadridge Financial Solutions, Inc. (NYSE:BR)||17||0||5|
|DST Systems, Inc. (NYSE:DST)||20||1||7|
|Morningstar, Inc. (NASDAQ:MORN)||8||0||10|
|Dun & Bradstreet Corp (NYSE:DNB)||12||0||5|
With the returns demonstrated by our time-tested strategies, retail investors must always monitor hedge fund and insider trading activity, and FactSet Research Systems Inc. (NYSE:FDS) shareholders fit into this picture quite nicely.