DealerTrack Technologies Inc (NASDAQ:TRAK) was in 9 hedge funds’ portfolio at the end of December. TRAK shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 10 hedge funds in our database with TRAK positions at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are viewed as worthless, old investment vehicles of years past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the masters of this group, about 450 funds. It is widely believed that this group controls most of all hedge funds’ total asset base, and by monitoring their highest performing stock picks, we have revealed a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to parse down the financial markets. Obviously, there are many reasons for an executive to downsize shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).
With all of this in mind, it’s important to take a glance at the recent action encompassing DealerTrack Technologies Inc (NASDAQ:TRAK).
Hedge fund activity in DealerTrack Technologies Inc (NASDAQ:TRAK)
At year’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.
When looking at the hedgies we track, Mariko Gordon’s Daruma Asset Management had the largest position in DealerTrack Technologies Inc (NASDAQ:TRAK), worth close to $47.4 million, comprising 2.8% of its total 13F portfolio. On Daruma Asset Management’s heels is Lanexa Global Management, managed by Ian P. Murray, which held a $2.5 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Paul Tudor Jones’s Tudor Investment Corp.
Seeing as DealerTrack Technologies Inc (NASDAQ:TRAK) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there were a few funds that slashed their entire stakes in Q4. Intriguingly, Israel Englander’s Millennium Management said goodbye to the largest position of the “upper crust” of funds we track, totaling about $2.1 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $0.8 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds in Q4.
How have insiders been trading DealerTrack Technologies Inc (NASDAQ:TRAK)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time period, DealerTrack Technologies Inc (NASDAQ:TRAK) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to DealerTrack Technologies Inc (NASDAQ:TRAK). These stocks are J2 Global Inc (NASDAQ:JCOM), VirnetX Holding Corporation (NYSEAMEX:VHC), ExactTarget Inc (NYSE:ET), and Angie’s List Inc (NASDAQ:ANGI). This group of stocks belong to the internet software & services industry and their market caps match TRAK’s market cap.