Is Intuit Inc. (NASDAQ:INTU) undervalued? The best stock pickers are in a bullish mood. The number of bullish hedge fund bets advanced by 5 recently.
In the eyes of most investors, hedge funds are perceived as unimportant, old investment tools of the past. While there are over 8000 funds trading at present, we at Insider Monkey choose to focus on the aristocrats of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by watching their highest performing picks, we have unsheathed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, bullish insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are many stimuli for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).
Now, it’s important to take a look at the latest action regarding Intuit Inc. (NASDAQ:INTU).
Hedge fund activity in Intuit Inc. (NASDAQ:INTU)
At Q1’s end, a total of 31 of the hedge funds we track were bullish in this stock, a change of 19% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, John Thaler’s JAT Capital Management had the largest position in Intuit Inc. (NASDAQ:INTU), worth close to $128.5 million, accounting for 6.4% of its total 13F portfolio. Coming in second is David Blood and Al Gore of Generation Investment Management, with a $108.8 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Robert Joseph Caruso’s Select Equity Group, Robert B. Gillam’s McKinley Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.
Consequently, some big names have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, initiated the most valuable call position in Intuit Inc. (NASDAQ:INTU). Alyeska Investment Group had 16.4 million invested in the company at the end of the quarter. George Soros’s Soros Fund Management also made a $12.1 million investment in the stock during the quarter. The other funds with brand new INTU positions are Andrew Sandler’s Sandler Capital Management, Malcolm Fairbairn’s Ascend Capital, and Dmitry Balyasny’s Balyasny Asset Management.
What have insiders been doing with Intuit Inc. (NASDAQ:INTU)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time period, Intuit Inc. (NASDAQ:INTU) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Intuit Inc. (NASDAQ:INTU). These stocks are Workday Inc (NYSE:WDAY), Catamaran Corp (USA) (NASDAQ:CTRX), CA, Inc. (NASDAQ:CA), salesforce.com, inc. (NYSE:CRM), and Adobe Systems Incorporated (NASDAQ:ADBE). This group of stocks belong to the application software industry and their market caps are closest to INTU’s market cap.