Is NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) undervalued? Hedge funds are turning less bullish. The number of long hedge fund positions were cut by 4 in recent months.
At the moment, there are plenty of gauges shareholders can use to watch stocks. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the S&P 500 by a very impressive margin (see just how much).
Just as beneficial, positive insider trading activity is a second way to parse down the investments you’re interested in. Obviously, there are plenty of incentives for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this method if you know where to look (learn more here).
Now, let’s take a look at the latest action encompassing NASDAQ OMX Group, Inc. (NASDAQ:NDAQ).
How have hedgies been trading NASDAQ OMX Group, Inc. (NASDAQ:NDAQ)?
In preparation for this year, a total of 17 of the hedge funds we track were long in this stock, a change of -19% from the third quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, JHL Capital Group, managed by James H. Litinsky, holds the most valuable position in NASDAQ OMX Group, Inc. (NASDAQ:NDAQ). JHL Capital Group has a $70 million position in the stock, comprising 10.3% of its 13F portfolio. On JHL Capital Group’s heels is Lakewood Capital Management, managed by Anthony Bozza, which held a $48 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include David Harding’s Winton Capital Management, Ken Griffin’s Citadel Investment Group and Anil Stevens and Glenn Shapiro’s Parameter Capital Management.
Judging by the fact that NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds who were dropping their entire stakes in Q4. Interestingly, Paul Ruddockáand Steve Heinz’s Lansdowne Partners dropped the biggest investment of all the hedgies we key on, worth an estimated $21 million in stock.. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its stock, about $5 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds in Q4.
Insider trading activity in NASDAQ OMX Group, Inc. (NASDAQ:NDAQ)
Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s time-tested strategies, retail investors should always pay attention to hedge fund and insider trading activity, and NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) is an important part of this process.
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