SS and C Technologies Holdings Inc (SSNC): Are Hedge Funds Right About This Stock?

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Is SS and C Technologies Holdings Inc (NASDAQ:SSNC) a buy here? Money managers are becoming hopeful. The number of bullish hedge fund positions rose by 1 in recent months.

To most market participants, hedge funds are assumed to be slow, outdated financial vehicles of years past. While there are over 8000 funds with their doors open at present, we at Insider Monkey look at the bigwigs of this club, around 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total asset base, and by paying attention to their top equity investments, we have found a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

TUDOR INVESTMENT CORP

Equally as key, optimistic insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are many motivations for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).

Now, we’re going to take a look at the latest action encompassing SS and C Technologies Holdings Inc (NASDAQ:SSNC).

How have hedgies been trading SS and C Technologies Holdings Inc (NASDAQ:SSNC)?

In preparation for this year, a total of 6 of the hedge funds we track held long positions in this stock, a change of 20% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.

When looking at the hedgies we track, D. E. Shaw’s D E Shaw had the biggest position in SS and C Technologies Holdings Inc (NASDAQ:SSNC), worth close to $1.6 million, comprising less than 0.1%% of its total 13F portfolio. On D E Shaw’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $1.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Paul Tudor Jones’s Tudor Investment Corp, Steven Cohen’s SAC Capital Advisors and Cliff Asness’s AQR Capital Management.

As one would reasonably expect, key hedge funds have jumped into SS and C Technologies Holdings Inc (NASDAQ:SSNC) headfirst. SAC Capital Advisors, managed by Steven Cohen, established the largest position in SS and C Technologies Holdings Inc (NASDAQ:SSNC). SAC Capital Advisors had 0.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter.

Insider trading activity in SS and C Technologies Holdings Inc (NASDAQ:SSNC)

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past 180 days. Over the last six-month time frame, SS and C Technologies Holdings Inc (NASDAQ:SSNC) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to SS and C Technologies Holdings Inc (NASDAQ:SSNC). These stocks are Convergys Corporation (NYSE:CVG), Aspen Technology, Inc. (NASDAQ:AZPN), Verint Systems Inc. (NASDAQ:VRNT), Guidewire Software Inc (NYSE:GWRE), and Qlik Technologies Inc (NASDAQ:QLIK). This group of stocks are the members of the business software & services industry and their market caps resemble SSNC’s market cap.

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