Ebix Inc (NASDAQ:EBIX) has experienced an increase in support from the world’s most elite money managers of late.
To most stock holders, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open at present, we at Insider Monkey look at the moguls of this group, around 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total asset base, and by monitoring their top stock picks, we have uncovered a few investment strategies that have historically outpaced the 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, optimistic insider trading activity is a second way to parse down the financial markets. Obviously, there are plenty of incentives for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
Now, we’re going to take a gander at the latest action regarding Ebix Inc (NASDAQ:EBIX).
Hedge fund activity in Ebix Inc (NASDAQ:EBIX)
In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 67% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Ebix Inc (NASDAQ:EBIX), worth close to $5 million, comprising 0% of its total 13F portfolio. Coming in second is Bares Capital Management, managed by Brian Bares, which held a $4 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the most valuable position in Ebix Inc (NASDAQ:EBIX). Millennium Management had 3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $2 million position during the quarter. The following funds were also among the new EBIX investors: Paul Tudor Jones’s Tudor Investment Corp, Steven Cohen’s SAC Capital Advisors, and Mike Vranos’s Ellington.
Insider trading activity in Ebix Inc (NASDAQ:EBIX)
Insider buying is most useful when the company in question has experienced transactions within the past six months. Over the latest half-year time frame, Ebix Inc (NASDAQ:EBIX) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Ebix Inc (NASDAQ:EBIX). These stocks are Interactive Intelligence Group Inc (NASDAQ:ININ), Tangoe Inc (NASDAQ:TNGO), CSG Systems International, Inc. (NASDAQ:CSGS), Servicesource International Inc (NASDAQ:SREV), and Descartes Systems Group (USA) (NASDAQ:DSGX). All of these stocks are in the business software & services industry and their market caps are closest to EBIX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Interactive Intelligence Group Inc (NASDAQ:ININ)||3||1||8|
|Tangoe Inc (NASDAQ:TNGO)||7||0||2|
|CSG Systems International, Inc. (NASDAQ:CSGS)||15||0||3|
|Servicesource International Inc (NASDAQ:SREV)||7||1||7|
|Descartes Systems Group (USA) (NASDAQ:DSGX)||2||0||0|
With the returns shown by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Ebix Inc (NASDAQ:EBIX) applies perfectly to this mantra.