In the eyes of many investors, hedge funds are assumed to be useless, old financial vehicles of an era lost to time. Although there are over 8,000 hedge funds trading currently, this site aim at the masters of this club, about 525 funds. Analysts calculate that this group controls the majority of all hedge funds’ total assets, and by tracking their highest quality picks, we’ve uncovered a few 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 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, optimistic insider trading activity is another way to analyze the world of equities. Just as you’d expect, there are many reasons for an insider to get rid of 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 “monkeys” know where to look (learn more here).
What’s more, let’s examine the recent info about Piper Jaffray Companies (NYSE:PJC).
What does the smart money think about Piper Jaffray Companies (NYSE:PJC)?
Heading into Q3, a total of 12 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly.
Out of the hedge funds we follow, Chuck Royce’s Royce & Associates had the most valuable position in Piper Jaffray Companies (NYSE:PJC), worth close to $13.7 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Parameter Capital Management, managed by Anil Stevens and Glenn Shapiro, which held a $7.4 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other peers with similar optimism include Cliff Asness’s AQR Capital Management, Jim Simons’s Renaissance Technologies and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.
Because Piper Jaffray Companies (NYSE:PJC) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers who sold off their full holdings in Q1. At the top of the heap, David Costen Haley’s HBK Investments sold off the largest stake of the 450+ funds we watch, valued at close to $0.9 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also sold off its stock, about $0.2 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Piper Jaffray Companies (NYSE:PJC)?
Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time frame, Piper Jaffray Companies (NYSE:PJC) has experienced zero unique insiders purchasing, 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 Piper Jaffray Companies (NYSE:PJC). These stocks are GFI Group Inc. (NYSE:GFIG), Medley Capital Corp (NYSE:MCC), FXCM Inc (NYSE:FXCM), Interactive Brokers Group, Inc. (NASDAQ:IBKR), and BGC Partners, Inc. (NASDAQ:BGCP). All of these stocks are in the investment brokerage – national industry and their market caps are similar to PJC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| GFI Group Inc. (NYSE:GFIG) | 8 | 0 | 0 |
| Medley Capital Corp (NYSE:MCC) | 4 | 0 | 0 |
| FXCM Inc (NYSE:FXCM) | 10 | 0 | 0 |
| Interactive Brokers Group, Inc. (NASDAQ:IBKR) | 13 | 0 | 0 |
| BGC Partners, Inc. (NASDAQ:BGCP) | 13 | 0 | 0 |
Using the results shown by our tactics, regular investors should always watch hedge fund and insider trading activity, and Piper Jaffray Companies (NYSE:PJC) shareholders fit into this picture quite nicely.
