Alliance Data Systems Corporation (NYSE:ADS) investors should be aware of a decrease in support from the world’s most elite money managers of late.
In the 21st century investor’s toolkit, there are tons of methods investors can use to monitor stocks. Two of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outperform the S&P 500 by a very impressive amount (see just how much).
Just as important, optimistic insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are plenty of motivations for an insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).
Consequently, we’re going to take a glance at the latest action encompassing Alliance Data Systems Corporation (NYSE:ADS).
How have hedgies been trading Alliance Data Systems Corporation (NYSE:ADS)?
At the end of the first quarter, a total of 21 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the most valuable position in Alliance Data Systems Corporation (NYSE:ADS), worth close to $86.5 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $78.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Israel Englander’s Millennium Management, James Dondero’s Highland Capital Management and Robert Pohly’s Samlyn Capital.
Judging by the fact that Alliance Data Systems Corporation (NYSE:ADS) has witnessed declining sentiment from hedge fund managers, we can see that there were a few fund managers that slashed their entire stakes in Q1. At the top of the heap, Israel Englander’s Millennium Management cut the largest position of all the hedgies we watch, totaling about $12 million in stock.. Wojciech Uzdelewicz’s fund, Espalier Global Management, also dumped its stock, about $7.2 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Alliance Data Systems Corporation (NYSE:ADS)
Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time frame, Alliance Data Systems Corporation (NYSE:ADS) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Alliance Data Systems Corporation (NYSE:ADS). These stocks are Moody’s Corporation (NYSE:MCO), Fiserv, Inc. (NASDAQ:FISV), Fidelity National Information Services (NYSE:FIS), FleetCor Technologies, Inc. (NYSE:FLT), and Verisk Analytics, Inc. (NASDAQ:VRSK). This group of stocks are the members of the business services industry and their market caps are closest to ADS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Moody’s Corporation (NYSE:MCO) | 38 | 2 | 4 |
| Fiserv, Inc. (NASDAQ:FISV) | 16 | 0 | 4 |
| Fidelity National Information Services (NYSE:FIS) | 35 | 0 | 7 |
| FleetCor Technologies, Inc. (NYSE:FLT) | 35 | 0 | 19 |
| Verisk Analytics, Inc. (NASDAQ:VRSK) | 28 | 0 | 11 |
With the returns shown by our research, everyday investors must always monitor hedge fund and insider trading sentiment, and Alliance Data Systems Corporation (NYSE:ADS) is no exception.
