In the eyes of many of your peers, hedge funds are viewed as delayed, outdated financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey looks at the moguls of this group, about 525 funds. It is assumed that this group oversees the lion’s share of the hedge fund industry’s total assets, and by keeping an eye on their highest performing picks, we’ve discovered a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as necessary, optimistic insider trading sentiment is a second way to analyze the financial markets. There are a variety of incentives for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this method if piggybackers know where to look (learn more here).
Keeping this in mind, we’re going to examine the recent info surrounding Teradata Corporation (NYSE:TDC).
What have hedge funds been doing with Teradata Corporation (NYSE:TDC)?
At the end of the second quarter, a total of 25 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, Generation Investment Management, managed by David Blood and Al Gore, holds the most valuable position in Teradata Corporation (NYSE:TDC). Generation Investment Management has a $231.8 million position in the stock, comprising 4.5% of its 13F portfolio. Sitting at the No. 2 spot is Legg Mason Capital Management, managed by Bill Miller, which held a $96.9 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Glenn Russell Dubin’s Highbridge Capital Management.
Since Teradata Corporation (NYSE:TDC) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few hedge funds that elected to cut their full holdings in Q1. Interestingly, Andrew J. M. Spokes’s Farallon Capital dropped the biggest investment of all the hedgies we track, worth close to $75.2 million in stock. Panayotis æTakisÆ Sparaggis’s fund, Alkeon Capital Management, also said goodbye to its stock, about $42.4 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Teradata Corporation (NYSE:TDC)
Legal insider trading, particularly when it’s bullish, is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Teradata Corporation (NYSE:TDC) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Teradata Corporation (NYSE:TDC). These stocks are International Business Machines Corp. (NYSE:IBM), Silicon Graphics International Corp (NASDAQ:SGI), Cray Inc. (NASDAQ:CRAY), and Hewlett-Packard Company (NYSE:HPQ). This group of stocks are in the diversified computer systems industry and their market caps resemble TDC’s market cap.