Is Computer Sciences Corporation (NYSE:CSC) a buy right now? The smart money is in a bullish mood. The number of long hedge fund positions moved up by 5 in recent months.
In the eyes of most traders, hedge funds are assumed to be underperforming, outdated investment tools of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey choose to focus on the bigwigs of this group, close to 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total asset base, and by watching their top picks, we have brought to light a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as important, bullish insider trading activity is a second way to break down the marketplace. Just as you’d expect, there are many motivations for an upper level exec to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if piggybackers understand where to look (learn more here).
With these “truths” under our belt, we’re going to take a look at the recent action encompassing Computer Sciences Corporation (NYSE:CSC).
How have hedgies been trading Computer Sciences Corporation (NYSE:CSC)?
At year’s end, a total of 24 of the hedge funds we track were long in this stock, a change of 26% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, Greenlight Capital, managed by David Einhorn, holds the largest position in Computer Sciences Corporation (NYSE:CSC). Greenlight Capital has a $309 million position in the stock, comprising 4.8% of its 13F portfolio. On Greenlight Capital’s heels is Larry Robbins of Glenview Capital, with a $170 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Cliff Asness’s AQR Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Columbus Circle Investors, managed by Donald Chiboucis, created the most outsized position in Computer Sciences Corporation (NYSE:CSC). Columbus Circle Investors had 28 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $24 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Hudson’s Glade Brook Capital Partners, Neil Chriss’s Hutchin Hill Capital, and Joel Greenblatt’s Gotham Asset Management.
What do corporate executives and insiders think about Computer Sciences Corporation (NYSE:CSC)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time period, Computer Sciences Corporation (NYSE:CSC) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the results demonstrated by our research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Computer Sciences Corporation (NYSE:CSC) is an important part of this process.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.