Medley Capital Corp (NYSE:MCC) investors should pay attention to a decrease in hedge fund interest recently.
In the eyes of most traders, hedge funds are assumed to be slow, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey hone in on the crème de la crème of this club, close to 450 funds. It is estimated that this group oversees the majority of all hedge funds’ total asset base, and by monitoring their top picks, we have formulated a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as important, optimistic insider trading activity is another way to break down the stock market universe. There are a variety of incentives for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).
Now, we’re going to take a look at the latest action regarding Medley Capital Corp (NYSE:MCC).
How are hedge funds trading Medley Capital Corp (NYSE:MCC)?
At the end of the first quarter, a total of 8 of the hedge funds we track were long in this stock, a change of -27% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Robert B. Gillam’s McKinley Capital Management had the largest position in Medley Capital Corp (NYSE:MCC), worth close to $6.4 million, comprising 0.3% of its total 13F portfolio. Coming in second is Clough Capital Partners, managed by Charles Clough, which held a $2.8 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Israel Englander’s Millennium Management, Anand Parekh’s Alyeska Investment Group and Bill Miller’s Legg Mason Capital Management.
Judging by the fact that Medley Capital Corp (NYSE:MCC) has experienced a declination in interest from the aggregate hedge fund industry, we can see that there is a sect of fund managers who were dropping their full holdings last quarter. Intriguingly, Brian Taylor’s Pine River Capital Management dropped the largest stake of all the hedgies we monitor, valued at an estimated $1.5 million in stock.. D. E. Shaw’s fund, D E Shaw, also dropped its stock, about $0.9 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds last quarter.
How have insiders been trading Medley Capital Corp (NYSE:MCC)?
Bullish insider trading is most useful when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Medley Capital Corp (NYSE:MCC) has seen 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Medley Capital Corp (NYSE:MCC). These stocks are Ladenburg Thalmann Financial Services (NYSEAMEX:LTS), Cowen Group, Inc. (NASDAQ:COWN), Piper Jaffray Companies (NYSE:PJC), GFI Group Inc. (NYSE:GFIG), and FXCM Inc (NYSE:FXCM). All of these stocks are in the investment brokerage – national industry and their market caps are closest to MCC’s market cap.