Is Verisk Analytics, Inc. (VRSK) A Good Stock To Buy?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Is Verisk Analytics, Inc. (NASDAQ:VRSK) a buy, sell, or hold? Money managers are in a bearish mood. The number of long hedge fund bets were trimmed by 2 recently. At the end of this article we will also compare VRSK to other stocks including Potash Corp./Saskatchewan (USA) (NYSE:POT), SBA Communications Corporation (NASDAQ:SBAC), and McCormick & Company, Incorporated (NYSE:MKC) to get a better sense of its popularity.

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How have hedgies been trading Verisk Analytics, Inc. (NASDAQ:VRSK)?

Heading into the fourth quarter of 2016, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, an 8% drop from one quarter earlier. Smart money ownership has trended down throughout the last year, though within a narrow range. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Akre Capital Management, managed by Charles Akre, holds the number one position in Verisk Analytics, Inc. (NASDAQ:VRSK). Akre Capital Management has a $210.2 million position in the stock, comprising 4% of its 13F portfolio. The second largest stake is held by Warren Buffett of Berkshire Hathaway, with a $127.1 million position. Other members of the smart money that hold long positions encompass Brian Bares’ Bares Capital Management, Ken Griffin’s Citadel Investment Group, and Robert Joseph Caruso’s Select Equity Group.

Due to the fact that Verisk Analytics, Inc. (NASDAQ:VRSK) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that James Parsons’ Junto Capital Management sold off the largest investment of the 700 funds monitored by Insider Monkey, valued at close to $38.2 million in stock. Barry Dargan’s fund, Intermede Investment Partners, also dropped its stock, about $30.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to Verisk Analytics, Inc. (NASDAQ:VRSK). We will take a look at Potash Corp./Saskatchewan (USA) (NYSE:POT), SBA Communications Corporation (NASDAQ:SBAC), McCormick & Company, Incorporated (NYSE:MKC), and Spectra Energy Partners, LP (NYSE:SEP). This group of stocks’ market caps match VRSK’s market cap.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $696 million. That figure was $592 million in VRSK’s case. SBA Communications Corporation (NASDAQ:SBAC) is the most popular stock in this table. On the other hand Spectra Energy Partners, LP (NYSE:SEP) is the least popular one with only 9 bullish hedge fund positions. Verisk Analytics, Inc. (NASDAQ:VRSK) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SBAC might be a better candidate to consider a long position in.

Disclosure: None