Hedge Funds Are Betting On Lender Processing Services, Inc. (LPS)

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Is Lender Processing Services, Inc. (NYSE:LPS) a good investment?

To many market players, hedge funds are viewed as delayed, old investment tools of an era lost to time. Although there are more than 8,000 hedge funds in operation in present day, this site aim at the bigwigs of this club, about 525 funds. It is assumed that this group controls most of the smart money’s total capital, and by monitoring their best investments, we’ve formulated a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as necessary, bullish insider trading activity is a second way to look at the stock market universe. Obviously, there are a number of incentives for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this method if piggybackers know what to do (learn more here).

Furthermore, we’re going to study the recent info for Lender Processing Services, Inc. (NYSE:LPS).

Hedge fund activity in Lender Processing Services, Inc. (NYSE:LPS)

At Q2’s end, a total of 31 of the hedge funds we track held long positions in this stock, a change of 35% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.

Lender Processing Services, Inc. (NYSE:LPS)When using filings from the hedgies we track, Jonathon Jacobson’s Highfields Capital Management had the largest position in Lender Processing Services, Inc. (NYSE:LPS), worth close to $90.1 million, accounting for 0.7% of its total 13F portfolio. On Highfields Capital Management’s heels is Robert Emil Zoellner of Alpine Associates, with a $59.4 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Michael Blitzer’s Kingstown Capital Management, Cliff Asness’s AQR Capital Management and Eric Mindich’s Eton Park Capital.

With a general bullishness amongst the titans, certain money managers were breaking ground themselves. Highfields Capital Management, managed by Jonathon Jacobson, initiated the biggest position in Lender Processing Services, Inc. (NYSE:LPS). Highfields Capital Management had 90.1 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also initiated a $59.4 million position during the quarter. The other funds with new positions in the stock are Michael Blitzer’s Kingstown Capital Management, Cliff Asness’s AQR Capital Management, and Eric Mindich’s Eton Park Capital.

How have insiders been trading Lender Processing Services, Inc. (NYSE:LPS)?

Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, Lender Processing Services, Inc. (NYSE:LPS) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Lender Processing Services, Inc. (NYSE:LPS). These stocks are HMS Holdings Corp. (NASDAQ:HMSY), Ritchie Bros. Auctioneers (USA) (NYSE:RBA), Deluxe Corporation (NYSE:DLX), Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), and RR Donnelley & Sons Co (NASDAQ:RRD). This group of stocks are the members of the business services industry and their market caps resemble LPS’s market cap.

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