If you’d ask most investors, hedge funds are viewed as worthless, old investment vehicles of the past. While there are more than 8000 funds trading at the moment, we at Insider Monkey choose to focus on the top tier of this group, about 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by tracking their highest performing investments, we have deciphered a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 24 percentage points in 7 months (explore the details and some picks here).
Just as important, bullish insider trading activity is a second way to parse down the world of equities. There are plenty of incentives for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).
Keeping this in mind, let’s take a glance at the latest action regarding FXCM Inc (NYSE:FXCM).
Hedge fund activity in FXCM Inc (NYSE:FXCM)
At the end of the fourth quarter, a total of 6 of the hedge funds we track were bullish in this stock, a change of 50% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, Michael Price’s MFP Investors had the largest position in FXCM Inc (NYSE:FXCM), worth close to $21.7 million, accounting for 3.1% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $12.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Israel Englander’s Millennium Management, Mike Vranos’s Ellington and Paul Tudor Jones’s Tudor Investment Corp.
Now, some big names were breaking ground themselves. MFP Investors, managed by Michael Price, created the largest position in FXCM Inc (NYSE:FXCM). MFP Investors had 21.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.4 million position during the quarter. The other funds with brand new FXCM positions are Mike Vranos’s Ellington and Paul Tudor Jones’s Tudor Investment Corp.
What do corporate executives and insiders think about FXCM Inc (NYSE:FXCM)?
Insider buying is at its handiest when the company in focus has seen transactions within the past six months. Over the latest six-month time period, FXCM Inc (NYSE:FXCM) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to FXCM Inc (NYSE:FXCM). These stocks are Interactive Brokers Group, Inc. (NASDAQ:IBKR), BGC Partners, Inc. (NASDAQ:BGCP), GFI Group Inc. (NYSE:GFIG), Piper Jaffray Companies (NYSE:PJC), and Medley Capital Corp (NYSE:MCC). This group of stocks belong to the investment brokerage – national industry and their market caps are closest to FXCM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Interactive Brokers Group, Inc. (NASDAQ:IBKR) | 11 | 0 | 3 |
| BGC Partners, Inc. (NASDAQ:BGCP) | 8 | 0 | 0 |
| GFI Group Inc. (NYSE:GFIG) | 4 | 0 | 2 |
| Piper Jaffray Companies (NYSE:PJC) | 10 | 0 | 4 |
| Medley Capital Corp (NYSE:MCC) | 11 | 1 | 0 |
With the returns shown by our time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and FXCM Inc (NYSE:FXCM) shareholders fit into this picture quite nicely.
