SAIC, Inc. (NYSE:SAI) investors should be aware of a decrease in enthusiasm from smart money lately.
In the 21st century investor’s toolkit, there are many gauges shareholders can use to monitor their holdings. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a healthy margin (see just how much).
Equally as important, optimistic insider trading activity is another way to break down the stock market universe. Obviously, there are a variety of reasons for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).
With all of this in mind, it’s important to take a look at the recent action surrounding SAIC, Inc. (NYSE:SAI).
What have hedge funds been doing with SAIC, Inc. (NYSE:SAI)?
In preparation for this year, a total of 18 of the hedge funds we track were long in this stock, a change of -18% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Carlson Capital, managed by Clint Carlson, holds the largest position in SAIC, Inc. (NYSE:SAI). Carlson Capital has a $21 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Eric Edidin and Josh Lobel of Archer Capital Management, with a $16 million position; 2.5% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Gregg J. Powers’s Private Capital Management, Joel Greenblatt’s Gotham Asset Management and Cliff Asness’s AQR Capital Management.
Seeing as SAIC, Inc. (NYSE:SAI) has witnessed falling interest from hedge fund managers, we can see that there exists a select few money managers that slashed their full holdings heading into 2013. Interestingly, Alec Litowitz and Ross Laser’s Magnetar Capital cut the largest position of the 450+ funds we key on, valued at close to $12 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund cut about $8 million worth. These transactions are important to note, as total hedge fund interest fell by 4 funds heading into 2013.
What do corporate executives and insiders think about SAIC, Inc. (NYSE:SAI)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, SAIC, Inc. (NYSE:SAI) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey’s research, everyday investors should always watch hedge fund and insider trading sentiment, and SAIC, Inc. (NYSE:SAI) applies perfectly to this mantra.
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.