In the eyes of many investors, hedge funds are perceived as bloated, outdated financial vehicles of an era lost to time. Although there are over 8,000 hedge funds in operation currently, this site looks at the bigwigs of this group, close to 525 funds. Analysts calculate that this group oversees most of all hedge funds’ total capital, and by monitoring their highest quality investments, we’ve come up with a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as useful, bullish insider trading activity is a second way to analyze the stock market universe. As the old adage goes: there are plenty of incentives for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).
Thus, it’s important to analyze the recent info about Morningstar, Inc. (NASDAQ:MORN).
What have hedge funds been doing with Morningstar, Inc. (NASDAQ:MORN)?
At Q2’s end, a total of 5 of the hedge funds we track held long positions in this stock, a change of -38% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully.
Out of the hedge funds we follow, Royce & Associates, managed by Chuck Royce, holds the largest position in Morningstar, Inc. (NASDAQ:MORN). Royce & Associates has a $142.5 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Bares Capital Management, managed by Brian Bares, which held a $13.6 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Morningstar, Inc. (NASDAQ:MORN) has witnessed dropping sentiment from the smart money’s best and brightest, it’s easy to see that there exists a select few funds who sold off their full holdings at the end of the second quarter. Intriguingly, Israel Englander’s Millennium Management dumped the largest stake of the “upper crust” of funds we key on, valued at about $1.1 million in stock, and D. E. Shaw of D E Shaw was right behind this move, as the fund dumped about $0.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 funds at the end of the second quarter.
How have insiders been trading Morningstar, Inc. (NASDAQ:MORN)?
Insider buying made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time period, Morningstar, Inc. (NASDAQ:MORN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Morningstar, Inc. (NASDAQ:MORN). These stocks are DigitalGlobe Inc (NYSE:DGI), FactSet Research Systems Inc. (NYSE:FDS), Broadridge Financial Solutions, Inc. (NYSE:BR), Dun & Bradstreet Corp (NYSE:DNB), and DST Systems, Inc. (NYSE:DST). This group of stocks are in the information & delivery services industry and their market caps match MORN’s market cap.