This Metric Says You Are Smart to Buy Fair Isaac Corporation (FICO)

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Is Fair Isaac Corporation (NYSE:FICO) a good investment?

To many investors, hedge funds are perceived as delayed, outdated financial vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds trading in present day, this site looks at the bigwigs of this group, about 525 funds. It is widely held that this group controls most of the smart money’s total capital, and by tracking their best equity investments, we’ve identified a number of investment strategies that have historically outperformed Mr. Market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as necessary, bullish insider trading sentiment is another way to analyze the marketplace. Obviously, there are many motivations for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this method if investors understand what to do (learn more here).

What’s more, we’re going to examine the latest info about Fair Isaac Corporation (NYSE:FICO).

What have hedge funds been doing with Fair Isaac Corporation (NYSE:FICO)?

In preparation for the third quarter, a total of 15 of the hedge funds we track were long in this stock, a change of 15% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably.

Fair Isaac Corporation (NYSE:FICO)Out of the hedge funds we follow, Chuck Royce’s Royce & Associates had the most valuable position in Fair Isaac Corporation (NYSE:FICO), worth close to $115.8 million, comprising 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is John W. Rogers of Ariel Investments, with a $94.2 million position; 1.5% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.

With a general bullishness amongst the titans, certain bigger names were breaking ground themselves. Royce & Associates, managed by Chuck Royce, created the most valuable position in Fair Isaac Corporation (NYSE:FICO). Royce & Associates had 115.8 million invested in the company at the end of the quarter. John W. Rogers’s Ariel Investments also initiated a $94.2 million position during the quarter. The other funds with brand new FICO positions are Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management, and D. E. Shaw’s D E Shaw.

How have insiders been trading Fair Isaac Corporation (NYSE:FICO)?

Insider buying is most useful when the company in focus has experienced transactions within the past six months. Over the last half-year time frame, Fair Isaac Corporation (NYSE:FICO) 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 Fair Isaac Corporation (NYSE:FICO). These stocks are Zillow Inc (NASDAQ:Z), The Advisory Board Company (NASDAQ:ABCO), Healthcare Services Group, Inc. (NASDAQ:HCSG), Shutterstock Inc (NYSE:SSTK), and Giant Interactive Group Inc (ADR) (NYSE:GA). This group of stocks are the members of the business services industry and their market caps are similar to FICO’s market cap.

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