SAP AG (ADR) (NYSE:SAP) has seen an increase in enthusiasm from smart money lately.
In the 21st century investor’s toolkit, there are plenty of methods market participants can use to analyze the equity markets. Some of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can trounce their index-focused peers by a healthy margin (see just how much).
Equally as integral, optimistic insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are many stimuli for an insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if shareholders understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the recent action surrounding SAP AG (ADR) (NYSE:SAP).
What have hedge funds been doing with SAP AG (ADR) (NYSE:SAP)?
In preparation for this year, a total of 11 of the hedge funds we track held long positions in this stock, a change of 120% from the third quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in SAP AG (ADR) (NYSE:SAP). Fisher Asset Management has a $514 million position in the stock, comprising 1.4% of its 13F portfolio. On Fisher Asset Management’s heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $17 million position; 0.6% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include SAC Subsidiary’s Sigma Capital Management, and Joe DiMenna’s ZWEIG DIMENNA PARTNERS.
Consequently, specific money managers were leading the bulls’ herd. Sigma Capital Management, managed by SAC Subsidiary, established the biggest position in SAP AG (ADR) (NYSE:SAP). Sigma Capital Management had 12 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $6 million position during the quarter. The following funds were also among the new SAP investors: Joe DiMenna’s ZWEIG DIMENNA PARTNERS, Israel Englander’s Millennium Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
How are insiders trading SAP AG (ADR) (NYSE:SAP)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past six months. Over the last half-year time period, SAP AG (ADR) (NYSE:SAP) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to SAP AG (ADR) (NYSE:SAP). These stocks are Oracle Corporation (NASDAQ:ORCL), Microsoft Corporation (NASDAQ:MSFT), salesforce.com, inc. (NYSE:CRM), Adobe Systems Incorporated (NASDAQ:ADBE), and Intuit Inc. (NASDAQ:INTU). All of these stocks are in the application software industry and their market caps resemble SAP’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Oracle Corporation (NASDAQ:ORCL)||65||0||8|
|Microsoft Corporation (NASDAQ:MSFT)||95||0||6|
|salesforce.com, inc. (NYSE:CRM)||35||1||15|
|Adobe Systems Incorporated (NASDAQ:ADBE)||35||1||10|
|Intuit Inc. (NASDAQ:INTU)||23||0||7|
With the returns exhibited by the aforementioned studies, retail investors should always watch hedge fund and insider trading activity, and SAP AG (ADR) (NYSE:SAP) applies perfectly to this mantra.
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