Is Automatic Data Processing (NASDAQ:ADP) a healthy stock for your portfolio? Investors who are in the know are in a bullish mood. The number of long hedge fund bets went up by 1 lately.
In today’s marketplace, there are tons of metrics investors can use to watch stocks. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a superb margin (see just how much).
Equally as key, positive insider trading sentiment is another way to parse down the stock market universe. Obviously, there are plenty of reasons for an executive to get rid of shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know where to look (learn more here).
Keeping this in mind, it’s important to take a peek at the key action surrounding Automatic Data Processing (NASDAQ:ADP).
What have hedge funds been doing with Automatic Data Processing (NASDAQ:ADP)?
Heading into 2013, a total of 25 of the hedge funds we track were long in this stock, a change of 4% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.
Of the funds we track, Jean-Marie Eveillard’s First Eagle Investment Management had the most valuable position in Automatic Data Processing (NASDAQ:ADP), worth close to $188 million billion, accounting for 0.7% of its total 13F portfolio. Coming in second is Markel Gayner Asset Management, managed by Tom Gayner, which held a $29 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, David Harding’s Winton Capital Management and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, specific money managers were breaking ground themselves. Bailard Inc, managed by Thomas Bailard, created the most outsized position in Automatic Data Processing (NASDAQ:ADP). Bailard Inc had 2 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also made a $1 million investment in the stock during the quarter. The following funds were also among the new ADP investors: James Dondero’s Highland Capital Management, Steven Cohen’s SAC Capital Advisors, and David Costen Haley’s HBK Investments.
What do corporate executives and insiders think about Automatic Data Processing (NASDAQ:ADP)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last six-month time period, Automatic Data Processing (NASDAQ:ADP) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned studies, everyday investors must always pay attention to hedge fund and insider trading activity, and Automatic Data Processing (NASDAQ:ADP) is no exception.
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.