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Visa Inc (NYSE:V): Are Hedge Funds Right About This Stock?

Visa Inc (NYSE:V) was in 74 hedge funds’ portfolio at the end of December. V investors should be aware of a decrease in activity from the world’s largest hedge funds of late. There were 74 hedge funds in our database with V positions at the end of the previous quarter.

Visa, American Express, Mastercard

In the eyes of most investors, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the crème de la crème of this club, close to 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total asset base, and by watching their highest performing equity investments, we have spotted a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced 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 topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Just as beneficial, positive insider trading activity is another way to parse down the marketplace. Obviously, there are many reasons for an executive to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).

With all of this in mind, it’s important to take a glance at the latest action encompassing Visa Inc (NYSE:V).

What have hedge funds been doing with Visa Inc (NYSE:V)?

At year’s end, a total of 74 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.

Of the funds we track, SPO Advisory Corp, managed by John H. Scully, holds the biggest position in Visa Inc (NYSE:V). SPO Advisory Corp has a $752 million billion position in the stock, comprising 11.8% of its 13F portfolio. Sitting at the No. 2 spot is Ken Fisher of Fisher Asset Management, with a $736 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Andreas Halvorsen’s Viking Global, Stephen Mandel’s Lone Pine Capital and Rob Citrone’s Discovery Capital Management.

Seeing as Visa Inc (NYSE:V) has experienced falling interest from the smart money, it’s safe to say that there were a few money managers that slashed their entire stakes last quarter. It’s worth mentioning that Louis Navellier’s Navellier & Associates dropped the largest position of all the hedgies we watch, comprising close to $70 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund cut about $21 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Visa Inc (NYSE:V)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Visa Inc (NYSE:V) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

With the results exhibited by Insider Monkey’s tactics, everyday investors must always pay attention to hedge fund and insider trading activity, and Visa Inc (NYSE:V) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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