To many of your fellow readers, hedge funds are assumed to be bloated, outdated financial vehicles of a forgotten age. Although there are more than 8,000 hedge funds trading currently, Insider Monkey aim at the leaders of this club, close to 525 funds. It is assumed that this group has its hands on the majority of the smart money’s total capital, and by watching their highest performing picks, we’ve discovered a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced 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 outpaced the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as crucial, positive insider trading sentiment is a second way to look at the financial markets. There are plenty of motivations for an executive to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).
What’s more, we’re going to discuss the latest info surrounding MAXIMUS, Inc. (NYSE:MMS).
How have hedgies been trading MAXIMUS, Inc. (NYSE:MMS)?
At the end of the second quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 23% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes substantially.
Out of the hedge funds we follow, Renaissance Technologies, managed by Jim Simons, holds the biggest position in MAXIMUS, Inc. (NYSE:MMS). Renaissance Technologies has a $75.1 million position in the stock, comprising 0.2% of its 13F portfolio. On Renaissance Technologies’s heels is Daruma Asset Management, managed by Mariko Gordon, which held a $68.1 million position; 3.3% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Chuck Royce’s Royce & Associates, Sean Cullinan’s Point State Capital and Israel Englander’s Millennium Management.
Now, certain money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, created the most outsized position in MAXIMUS, Inc. (NYSE:MMS). Renaissance Technologies had 75.1 million invested in the company at the end of the quarter. Mariko Gordon’s Daruma Asset Management also made a $68.1 million investment in the stock during the quarter. The other funds with brand new MMS positions are Chuck Royce’s Royce & Associates, Sean Cullinan’s Point State Capital, and Israel Englander’s Millennium Management.
What have insiders been doing with MAXIMUS, Inc. (NYSE:MMS)?
Insider buying is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last six-month time period, MAXIMUS, Inc. (NYSE:MMS) has seen zero unique insiders purchasing, 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 MAXIMUS, Inc. (NYSE:MMS). These stocks are Lender Processing Services, Inc. (NYSE:LPS), RR Donnelley & Sons Co (NASDAQ:RRD), Ritchie Bros. Auctioneers (USA) (NYSE:RBA), HMS Holdings Corp. (NASDAQ:HMSY), and WEX Inc (NYSE:WXS). This group of stocks are the members of the business services industry and their market caps resemble MMS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Lender Processing Services, Inc. (NYSE:LPS)||31||0||0|
|RR Donnelley & Sons Co (NASDAQ:RRD)||20||0||0|
|Ritchie Bros. Auctioneers (USA) (NYSE:RBA)||13||0||0|
|HMS Holdings Corp. (NASDAQ:HMSY)||14||0||0|
|WEX Inc (NYSE:WXS)||10||0||0|
Using the returns demonstrated by our research, regular investors should always keep one eye on hedge fund and insider trading sentiment, and MAXIMUS, Inc. (NYSE:MMS) is no exception.