Should MarketAxess Holdings Inc. (NASDAQ:MKTX) investors track the following data?
In the eyes of many market players, hedge funds are viewed as bloated, old financial tools of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open in present day, Insider Monkey aim at the upper echelon of this group, around 525 funds. It is widely held that this group oversees most of all hedge funds’ total capital, and by keeping an eye on their best stock picks, we’ve deciphered a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as crucial, bullish insider trading sentiment is a second way to analyze the marketplace. There are a variety of incentives for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).
Furthermore, it’s important to discuss the newest info about MarketAxess Holdings Inc. (NASDAQ:MKTX).
How have hedgies been trading MarketAxess Holdings Inc. (NASDAQ:MKTX)?
At the end of the second quarter, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully.
According to our 13F database, Jim Simons’s Renaissance Technologies had the largest position in MarketAxess Holdings Inc. (NASDAQ:MKTX), worth close to $23.4 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $20 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions include Ken Griffin’s Citadel Investment Group, and Cliff Asness’s AQR Capital Management.
Judging by the fact that MarketAxess Holdings Inc. (NASDAQ:MKTX) has faced dropping sentiment from the smart money’s best and brightest, we can see that there were a few hedgies who were dropping their full holdings heading into Q2. Intriguingly, Mike Vranos’s Ellington said goodbye to the largest position of the 450+ funds we track, valued at close to $1 million in stock, and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund dropped about $0.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into Q2.
How have insiders been trading MarketAxess Holdings Inc. (NASDAQ:MKTX)?
Legal insider trading, particularly when it’s bullish, is at its handiest when the company in question has experienced transactions within the past half-year. Over the latest six-month time period, MarketAxess Holdings Inc. (NASDAQ:MKTX) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to MarketAxess Holdings Inc. (NASDAQ:MKTX). These stocks are LPL Financial Holdings Inc (NASDAQ:LPLA), Piper Jaffray Companies (NYSE:PJC), E TRADE Financial Corporation (NASDAQ:ETFC), BGC Partners, Inc. (NASDAQ:BGCP), and Interactive Brokers Group, Inc. (NASDAQ:IBKR). This group of stocks belong to the investment brokerage – national industry and their market caps are closest to MKTX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|LPL Financial Holdings Inc (NASDAQ:LPLA)||15||0||0|
|Piper Jaffray Companies (NYSE:PJC)||12||0||0|
|E TRADE Financial Corporation (NASDAQ:ETFC)||35||0||0|
|BGC Partners, Inc. (NASDAQ:BGCP)||13||0||0|
|Interactive Brokers Group, Inc. (NASDAQ:IBKR)||13||0||0|
Using the results explained by our strategies, regular investors must always track hedge fund and insider trading sentiment, and MarketAxess Holdings Inc. (NASDAQ:MKTX) is no exception.