Msci Inc (MSCI): Insiders Aren’t Crazy About It

Is Msci Inc (NYSE:MSCI) the right investment to pursue these days? The best stock pickers are becoming less confident. The number of long hedge fund positions fell by 3 lately.

In the eyes of most shareholders, hedge funds are seen as worthless, old investment vehicles of years past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the top tier of this group, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total asset base, and by watching their highest performing picks, we have identified a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started 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).

Msci Inc (NYSE:MSCI)Just as key, positive insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are plenty of motivations for an executive to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this strategy if “monkeys” know where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the recent action regarding Msci Inc (NYSE:MSCI).

How are hedge funds trading Msci Inc (NYSE:MSCI)?

In preparation for this quarter, a total of 10 of the hedge funds we track were long in this stock, a change of -23% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes meaningfully.

According to our comprehensive database, David Blood and Al Gore’s Generation Investment Management had the biggest position in Msci Inc (NYSE:MSCI), worth close to $301.2 million, accounting for 6.1% of its total 13F portfolio. Coming in second is ValueAct Capital, managed by Jeffrey Ubben, which held a $209 million position; 2.4% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include John C. Walker’s Stonerise Capital Management, Chuck Royce’s Royce & Associates and Israel Englander’s Millennium Management.

Seeing as Msci Inc (NYSE:MSCI) has faced falling interest from hedge fund managers, it’s safe to say that there exists a select few fund managers who were dropping their full holdings in Q1. Interestingly, Mark Kingdon’s Kingdon Capital said goodbye to the biggest stake of all the hedgies we watch, valued at close to $8.8 million in stock.. Richard Chilton’s fund, Chilton Investment Company, also dropped its stock, about $8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in Q1.

How are insiders trading Msci Inc (NYSE:MSCI)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time period, Msci Inc (NYSE:MSCI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Msci Inc (NYSE:MSCI). These stocks are SolarWinds Inc (NYSE:SWI), CommVault Systems, Inc. (NASDAQ:CVLT), Fortinet Inc (NASDAQ:FTNT), Cadence Design Systems Inc (NASDAQ:CDNS), and Splunk Inc (NASDAQ:SPLK). This group of stocks are the members of the application software industry and their market caps are similar to MSCI’s market cap.