Is it a good idea to be bullish on SAIC, Inc. (NYSE:SAI)?
If you were to ask many market players, hedge funds are perceived as bloated, outdated financial vehicles of an era lost to time. Although there are over 8,000 hedge funds with their doors open today, this site looks at the aristocrats of this group, about 525 funds. Analysts calculate that this group has its hands on the lion’s share of the hedge fund industry’s total assets, and by paying attention to their highest performing picks, we’ve unearthed a number of investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, optimistic insider trading sentiment is a second way to look at the stock market universe. Just as you’d expect, there are a variety of motivations for an executive to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if “monkeys” understand where to look (learn more here).
Furthermore, let’s discuss the newest info surrounding SAIC, Inc. (NYSE:SAI).
What does the smart money think about SAIC, Inc. (NYSE:SAI)?
Heading into Q3, a total of 22 of the hedge funds we track were long in this stock, a change of 38% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings significantly.
Out of the hedge funds we follow, David Cohen and Harold Levy’s Iridian Asset Management had the largest position in SAIC, Inc. (NYSE:SAI), worth close to $163.4 million, comprising 2.1% of its total 13F portfolio. Coming in second is First Eagle Investment Management, managed by Matt McLennan, which held a $25.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Gregg J. Powers’s Private Capital Management and Mark Travis’s Intrepid Capital Management.
With a general bullishness amongst the titans, particular hedge funds have jumped into SAIC, Inc. (NYSE:SAI) headfirst. Iridian Asset Management, managed by David Cohen and Harold Levy, assembled the largest position in SAIC, Inc. (NYSE:SAI). Iridian Asset Management had 163.4 million invested in the company at the end of the quarter. Matt McLennan’s First Eagle Investment Management also made a $25.1 million investment in the stock during the quarter. The following funds were also among the new SAI investors: Jim Simons’s Renaissance Technologies, Gregg J. Powers’s Private Capital Management, and Mark Travis’s Intrepid Capital Management.
What do corporate executives and insiders think about SAIC, Inc. (NYSE:SAI)?
Legal insider trading, particularly when it’s bullish, is at its handiest when the company in focus has seen transactions within the past six months. Over the latest six-month time period, SAIC, Inc. (NYSE:SAI) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to SAIC, Inc. (NYSE:SAI). These stocks are Jacobs Engineering Group Inc (NYSE:JEC), The Shaw Group Inc. (NYSE:SHAW), AECOM Technology Corp (NYSE:ACM), URS Corp (NYSE:URS), and KBR, Inc. (NYSE:KBR). This group of stocks are in the technical services industry and their market caps resemble SAI’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Jacobs Engineering Group Inc (NYSE:JEC)||17||0||0|
|The Shaw Group Inc. (NYSE:SHAW)||0||0|
|AECOM Technology Corp (NYSE:ACM)||19||0||0|
|URS Corp (NYSE:URS)||23||0||0|
|KBR, Inc. (NYSE:KBR)||28||0||0|
Using the results demonstrated by the previously mentioned strategies, regular investors should always keep one eye on hedge fund and insider trading sentiment, and SAIC, Inc. (NYSE:SAI) applies perfectly to this mantra.