This Metric Says You Are Smart to Sell Navigant Consulting, Inc. (NCI)

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Should Navigant Consulting, Inc. (NYSE:NCI) investors track the following data?

Now, according to many of your fellow readers, hedge funds are assumed to be bloated, old investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds with their doors open today, this site looks at the upper echelon of this club, close to 525 funds. It is widely held that this group oversees the lion’s share of the smart money’s total capital, and by monitoring their best stock picks, we’ve identified a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 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 analyze the investments you’re interested in. Just as you’d expect, there are lots of incentives for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).

Now that that’s out of the way, it’s important to study the recent info for Navigant Consulting, Inc. (NYSE:NCI).

What does the smart money think about Navigant Consulting, Inc. (NYSE:NCI)?

Heading into Q3, a total of 11 of the hedge funds we track held long positions in this stock, a change of -21% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.

Navigant Consulting, Inc. (NYSE:NCI)Out of the hedge funds we follow, D. E. Shaw’s D E Shaw had the largest position in Navigant Consulting, Inc. (NYSE:NCI), worth close to $3.4 million, comprising less than 0.1%% of its total 13F portfolio. On D E Shaw’s heels is AQR Capital Management, managed by Cliff Asness, which held a $3.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include David Dreman’s Dreman Value Management, Joel Greenblatt’s Gotham Asset Management and Ken Griffin’s Citadel Investment Group.

As Navigant Consulting, Inc. (NYSE:NCI) has faced declining interest from the top-tier hedge fund industry, we can see that there were a few hedgies who were dropping their positions entirely last quarter. It’s worth mentioning that Israel Englander’s Millennium Management dropped the biggest investment of all the hedgies we key on, totaling an estimated $1.7 million in stock. Neil Chriss’s fund, Hutchin Hill Capital, also cut its stock, about $0.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.

How are insiders trading Navigant Consulting, Inc. (NYSE:NCI)?

Insider buying is most useful when the primary stock in question has seen transactions within the past six months. Over the last 180-day time period, Navigant Consulting, Inc. (NYSE:NCI) 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 Navigant Consulting, Inc. (NYSE:NCI). These stocks are Huron Consulting Group (NASDAQ:HURN), Resources Connection, Inc. (NASDAQ:RECN), ICF International Inc (NASDAQ:ICFI), Wageworks Inc (NYSE:WAGE), and Exponent, Inc. (NASDAQ:EXPO). This group of stocks are in the management services industry and their market caps are closest to NCI’s market cap.

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