Is Credit Acceptance Corp. (NASDAQ:CACC) a buy here? Hedge funds are in a bearish mood. The number of long hedge fund bets decreased by 1 recently.
In today’s marketplace, there are plenty of indicators market participants can use to monitor stocks. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the broader indices by a healthy margin (see just how much).
Just as key, optimistic insider trading sentiment is another way to break down the world of equities. Just as you’d expect, there are a number of stimuli for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).
Keeping this in mind, it’s important to take a peek at the recent action encompassing Credit Acceptance Corp. (NASDAQ:CACC).
How have hedgies been trading Credit Acceptance Corp. (NASDAQ:CACC)?
At year’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the largest position in Credit Acceptance Corp. (NASDAQ:CACC). Renaissance Technologies has a $37.5 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is William von Mueffling of Cantillon Capital Management, with a $31 million position; 1.2% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Quincy Lee’s Ancient Art (Teton Capital), Edward Goodnow’s Goodnow Investment Group and Cliff Asness’s AQR Capital Management.
Since Credit Acceptance Corp. (NASDAQ:CACC) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of funds that slashed their positions entirely heading into 2013. Intriguingly, Israel Englander’s Millennium Management sold off the largest stake of all the hedgies we watch, worth close to $0.8 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $0.5 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into 2013.
How are insiders trading Credit Acceptance Corp. (NASDAQ:CACC)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time period, Credit Acceptance Corp. (NASDAQ:CACC) has seen 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Credit Acceptance Corp. (NASDAQ:CACC). These stocks are PHH Corporation (NYSE:PHH), Cash America International, Inc. (NYSE:CSH), Nelnet, Inc. (NYSE:NNI), First Cash Financial Services, Inc. (NASDAQ:FCFS), and CapitalSource, Inc. (NYSE:CSE). This group of stocks belong to the credit services industry and their market caps resemble CACC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| PHH Corporation (NYSE:PHH) | 28 | 0 | 2 |
| Cash America International, Inc. (NYSE:CSH) | 12 | 0 | 4 |
| Nelnet, Inc. (NYSE:NNI) | 14 | 0 | 2 |
| First Cash Financial Services, Inc. (NASDAQ:FCFS) | 7 | 0 | 4 |
| CapitalSource, Inc. (NYSE:CSE) | 14 | 0 | 2 |
With the returns exhibited by Insider Monkey’s time-tested strategies, everyday investors must always monitor hedge fund and insider trading activity, and Credit Acceptance Corp. (NASDAQ:CACC) is an important part of this process.
