NewStar Financial Inc (NASDAQ:NEWS) was in 5 hedge funds’ portfolio at the end of the first quarter of 2013. NEWS shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 6 hedge funds in our database with NEWS positions at the end of the previous quarter.
In the 21st century investor’s toolkit, there are plenty of metrics market participants can use to monitor publicly traded companies. A couple of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the market by a significant amount (see just how much).
Equally as integral, positive insider trading sentiment is another way to parse down the stock market universe. There are a number of incentives for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the useful potential of this tactic if investors understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the latest action encompassing NewStar Financial Inc (NASDAQ:NEWS).
How are hedge funds trading NewStar Financial Inc (NASDAQ:NEWS)?
At Q1’s end, a total of 5 of the hedge funds we track held long positions in this stock, a change of -17% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Second Curve Capital, managed by Tom Brown, holds the biggest position in NewStar Financial Inc (NASDAQ:NEWS). Second Curve Capital has a $60.5 million position in the stock, comprising 15.5% of its 13F portfolio. The second largest stake is held by Manatuck Hill Partners, managed by Mark Broach, which held a $3.7 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Cliff Asness’s AQR Capital Management.
Since NewStar Financial Inc (NASDAQ:NEWS) has experienced falling interest from hedge fund managers, logic holds that there exists a select few hedge funds who were dropping their full holdings in Q1. Interestingly, D.T. Ignacio Jayanti’s Corsair Capital LLC said goodbye to the biggest position of the 450+ funds we monitor, totaling an estimated $133.2 million in stock., and D.T. Ignacio Jayanti of Corsair Capital LLC was right behind this move, as the fund dropped about $0.8 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds in Q1.
How are insiders trading NewStar Financial Inc (NASDAQ:NEWS)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, NewStar Financial Inc (NASDAQ:NEWS) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to NewStar Financial Inc (NASDAQ:NEWS). These stocks are PHH Corporation (NYSE:PHH), World Acceptance Corp. (NASDAQ:WRLD), Global Cash Access Holdings, Inc. (NYSE:GCA), Fifth Street Finance Corp. (NASDAQ:FSC), and DFC Global Corp (NASDAQ:DLLR). This group of stocks are the members of the credit services industry and their market caps are closest to NEWS’s market cap.