ExlService Holdings, Inc. (NASDAQ:EXLS) investors should pay attention to an increase in hedge fund interest of late.
If you’d ask most shareholders, hedge funds are viewed as underperforming, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, we hone in on the masters of this club, about 450 funds. It is widely believed that this group has its hands on the majority of all hedge funds’ total asset base, and by keeping an eye on their top picks, we have unearthed a number of investment strategies that have historically outpaced Mr. 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, optimistic insider trading sentiment is a second way to parse down the world of equities. There are a variety of stimuli for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a look at the latest action surrounding ExlService Holdings, Inc. (NASDAQ:EXLS).
What have hedge funds been doing with ExlService Holdings, Inc. (NASDAQ:EXLS)?
In preparation for this quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Eminence Capital, managed by Ricky Sandler, holds the biggest position in ExlService Holdings, Inc. (NASDAQ:EXLS). Eminence Capital has a $17.3 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $12.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Cliff Asness’s AQR Capital Management and Joel Greenblatt’s Gotham Asset Management.
Consequently, some big names were leading the bulls’ herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the biggest position in ExlService Holdings, Inc. (NASDAQ:EXLS). Two Sigma Advisors had 1.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.3 million position during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.
How have insiders been trading ExlService Holdings, Inc. (NASDAQ:EXLS)?
Insider buying is particularly usable when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, ExlService Holdings, Inc. (NASDAQ:EXLS) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to ExlService Holdings, Inc. (NASDAQ:EXLS). These stocks are Quad/Graphics, Inc. (NYSE:QUAD), TeleTech Holdings, Inc. (NASDAQ:TTEC), NetSpend Holdings Inc (NASDAQ:NTSP), Moneygram International Inc (NYSE:MGI), and Infoblox Inc (NYSE:BLOX). This group of stocks are in the business services industry and their market caps are similar to EXLS’s market cap.