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Do Hedge Funds Love Verisk Analytics, Inc. (VRSK)?

Does Verisk Analytics, Inc. (NASDAQ:VRSK) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Verisk Analytics, Inc. (NASDAQ:VRSK) investors should be aware of a decrease in hedge fund sentiment in recent months. VRSK was in 28 hedge funds’ portfolios at the end of September. There were 37 hedge funds in our database with VRSK holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Enersis S.A. (ADR) (NYSE:ENI), Universal Health Services, Inc. (NYSE:UHS), and CarMax, Inc (NYSE:KMX) to gather more data points.

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Now, let’s analyze the fresh action encompassing Verisk Analytics, Inc. (NASDAQ:VRSK).

How are hedge funds trading Verisk Analytics, Inc. (NASDAQ:VRSK)?

Heading into Q4, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -24% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Akre Capital Management, managed by Charles Akre, holds the biggest position in Verisk Analytics, Inc. (NASDAQ:VRSK). Akre Capital Management has an $158.2 million position in the stock, comprising 3.7% of its 13F portfolio. Coming in second is Berkshire Hathaway, managed by Warren Buffett, which holds an $115.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish consist of D E Shaw, Jim Simons’ Renaissance Technologies and Panayotis Takis Sparaggis’s Alkeon Capital Management.

Judging by the fact that Verisk Analytics, Inc. (NASDAQ:VRSK) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedgies that elected to cut their full holdings heading into Q4. Interestingly, Israel Englander’s Millennium Management cut the largest stake of the “upper crust” of funds followed by Insider Monkey, comprising close to $56.3 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund said goodbye to about $41 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 9 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Verisk Analytics, Inc. (NASDAQ:VRSK). We will take a look at Enersis S.A. (ADR) (NYSE:ENI), Universal Health Services, Inc. (NYSE:UHS), CarMax, Inc (NYSE:KMX), and Akamai Technologies, Inc. (NASDAQ:AKAM). This group of stocks’ market valuations are closest to VRSK’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ENI 13 109050 0
UHS 44 1040008 -6
KMX 27 890630 -13
AKAM 37 964219 -2

As you can see these stocks had an average of 30.25 hedge funds with bullish positions and the average amount invested in these stocks was $751 million. That figure was $724 million in VRSK’s case. Universal Health Services, Inc. (NYSE:UHS) is the most popular stock in this table. On the other hand Enersis S.A. (ADR) (NYSE:ENI) is the least popular one with only 13 bullish hedge fund positions. Verisk Analytics, Inc. (NASDAQ:VRSK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard UHS might be a better candidate to consider a long position.

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