Is Interactive Brokers Group, Inc. (NASDAQ:IBKR) a good investment?
At the moment, there are tons of gauges shareholders can use to monitor their holdings. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite investment managers can outclass the S&P 500 by a significant margin (see just how much).
Just as key, positive insider trading sentiment is another way to analyze the marketplace. Just as you’d expect, there are lots of reasons for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know what to do (learn more here).
Thus, let’s examine the recent info about Interactive Brokers Group, Inc. (NASDAQ:IBKR).
What does the smart money think about Interactive Brokers Group, Inc. (NASDAQ:IBKR)?
Heading into Q3, a total of 13 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly.
When using filings from the hedgies we track, Quincy Lee’s Ancient Art (Teton Capital) had the largest position in Interactive Brokers Group, Inc. (NASDAQ:IBKR), worth close to $43.1 million, comprising 11.8% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $26.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include David Dreman’s Dreman Value Management, Chuck Royce’s Royce & Associates and Jim Simons’s Renaissance Technologies.
As Interactive Brokers Group, Inc. (NASDAQ:IBKR) has witnessed a fall in interest from the top-tier hedge fund industry, we can see that there lies a certain “tier” of funds who sold off their entire stakes in Q1. At the top of the heap, Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest stake of all the hedgies we monitor, totaling close to $2 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Interactive Brokers Group, Inc. (NASDAQ:IBKR)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past six months. Over the last half-year time period, Interactive Brokers Group, Inc. (NASDAQ:IBKR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Interactive Brokers Group, Inc. (NASDAQ:IBKR). These stocks are GFI Group Inc. (NYSE:GFIG), Medley Capital Corp (NYSE:MCC), FXCM Inc (NYSE:FXCM), Piper Jaffray Companies (NYSE:PJC), and BGC Partners, Inc. (NASDAQ:BGCP). All of these stocks are in the investment brokerage – national industry and their market caps resemble IBKR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|GFI Group Inc. (NYSE:GFIG)||8||0||0|
|Medley Capital Corp (NYSE:MCC)||4||0||0|
|FXCM Inc (NYSE:FXCM)||10||0||0|
|Piper Jaffray Companies (NYSE:PJC)||12||0||0|
|BGC Partners, Inc. (NASDAQ:BGCP)||13||0||0|
Using the results demonstrated by the previously mentioned analyses, average investors should always track hedge fund and insider trading activity, and Interactive Brokers Group, Inc. (NASDAQ:IBKR) is no exception.