Visa Inc (V): Key Info To Watch

Is Visa Inc (NYSE:V) the right pick for your portfolio? The smart money is reducing their bets on the stock. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience

Visa Inc (NYSE:V)

In the eyes of most traders, hedge funds are assumed to be worthless, old investment vehicles of years past. While there are more than 8000 funds trading at the moment, we at Insider Monkey look at the aristocrats of this club, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by paying attention to their best picks, we have determined a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as beneficial, optimistic insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are plenty of motivations for an executive to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a glance at the recent action encompassing Visa Inc (NYSE:V).

How are hedge funds trading Visa Inc (NYSE:V)?

Heading into 2013, a total of 74 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, John H. Scully’s SPO Advisory Corp had the biggest position in Visa Inc (NYSE:V), worth close to $752.1 million, comprising 11.8% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Fisher of Fisher Asset Management, with a $735.7 million position; 2% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Andreas Halvorsen’s Viking Global, Stephen Mandel’s Lone Pine Capital and Rob Citrone’s Discovery Capital Management.

Judging by the fact that Visa Inc (NYSE:V) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few funds that slashed their entire stakes in Q4. It’s worth mentioning that Louis Navellier’s Navellier & Associates dumped the biggest investment of the “upper crust” of funds we watch, worth about $70.4 million in stock.. Richard Schimel’s fund, Diamondback Capital, also dropped its stock, about $21.2 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Visa Inc (NYSE:V)?

Insider buying is best served when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time frame, Visa Inc (NYSE:V) has experienced zero unique insiders purchasing, and 10 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 Visa Inc (NYSE:V). These stocks are Verisk Analytics, Inc. (NASDAQ:VRSK), Fidelity National Information Services (NYSE:FIS), Fiserv, Inc. (NASDAQ:FISV), Moody’s Corporation (NYSE:MCO), and Mastercard Inc (NYSE:MA). This group of stocks are in the business services industry and their market caps are closest to V’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Verisk Analytics, Inc. (NASDAQ:VRSK) 25 0 11
Fidelity National Information Services (NYSE:FIS) 35 0 7
Fiserv, Inc. (NASDAQ:FISV) 18 0 5
Moody’s Corporation (NYSE:MCO) 27 2 2
Mastercard Inc (NYSE:MA) 69 0 5

With the results demonstrated by the aforementioned tactics, everyday investors must always pay attention to hedge fund and insider trading activity, and Visa Inc (NYSE:V) applies perfectly to this mantra.

Click here to learn why you should track hedge funds

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