Is Mastercard Inc (NYSE:MA) a buy here? Investors who are in the know are in a pessimistic mood. The number of long hedge fund bets were trimmed by 7 in recent months.
To the average investor, there are plenty of metrics market participants can use to analyze the equity markets. A pair of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outpace their index-focused peers by a significant amount (see just how much).
Just as beneficial, bullish insider trading sentiment is another way to parse down the financial markets. Obviously, there are plenty of stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).
Now, it’s important to take a glance at the latest action regarding Mastercard Inc (NYSE:MA).
What does the smart money think about Mastercard Inc (NYSE:MA)?
Heading into 2013, a total of 68 of the hedge funds we track held long positions in this stock, a change of -9% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, Tom Russo’s Gardner Russo & Gardner had the biggest position in Mastercard Inc (NYSE:MA), worth close to $510.8 million, accounting for 6% of its total 13F portfolio. The second largest stake is held by Tiger Global Management LLC, managed by Chase Coleman and Feroz Dewan, which held a $339.8 million position; 5.3% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Andreas Halvorsen’s Viking Global, Jim Simons’s Renaissance Technologies and John Armitage’s Egerton Capital Limited.
Since Mastercard Inc (NYSE:MA) has faced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few money managers that slashed their positions entirely at the end of the quarter. Intriguingly, Michael Karsch’s Karsch Capital Management dumped the largest stake of the 450+ funds we track, worth close to $36.4 million in stock.. John Lykouretzos’s fund, Hoplite Capital Management, also cut its stock, about $33.4 million worth. These moves are important to note, as total hedge fund interest was cut by 7 funds at the end of the quarter.
What do corporate executives and insiders think about Mastercard Inc (NYSE:MA)?
Insider buying is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Mastercard Inc (NYSE:MA) has experienced zero unique insiders buying, and 6 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 Mastercard Inc (NYSE:MA). These stocks are Verisk Analytics, Inc. (NASDAQ:VRSK), Fidelity National Information Services (NYSE:FIS), Fiserv, Inc. (NASDAQ:FISV), Moody’s Corporation (NYSE:MCO), and Visa Inc (NYSE:V). This group of stocks are in the business services industry and their market caps are similar to MA’s market cap.