Verisk Analytics, Inc. (NASDAQ:VRSK) has experienced an increase in hedge fund sentiment in recent months. Even though VRSK isn’t among the 30 most popular stocks among hedge funds, overall hedge fund sentiment towards the stock reached its all time high in the fourth quarter of 2018. The details are below.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a glance at the recent hedge fund action surrounding Verisk Analytics, Inc. (NASDAQ:VRSK).
Hedge fund activity in Verisk Analytics, Inc. (NASDAQ:VRSK)
Heading into the first quarter of 2019, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in VRSK a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Charles Akre’s Akre Capital Management has the biggest position in Verisk Analytics, Inc. (NASDAQ:VRSK), worth close to $277.3 million, corresponding to 3.5% of its total 13F portfolio. Sitting at the No. 2 spot is Farallon Capital, with a $157.1 million position; 1.3% of its 13F portfolio is allocated to the company. Other peers that are bullish encompass Ric Dillon’s Diamond Hill Capital, James Parsons’s Junto Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Junto Capital Management initiated the most valuable position in Verisk Analytics, Inc. (NASDAQ:VRSK). Junto Capital Management had $50.6 million invested in the company at the end of the quarter. Bruce Garelick’s Garelick Capital Partners also initiated a $8.5 million position during the quarter. The other funds with brand new VRSK positions are Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Israel Englander’s Millennium Management, and Jim Simons’s Renaissance Technologies.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Verisk Analytics, Inc. (NASDAQ:VRSK) but similarly valued. We will take a look at TransDigm Group Incorporated (NYSE:TDG), Verisign, Inc. (NASDAQ:VRSN), Palo Alto Networks Inc (NYSE:PANW), and Cintas Corporation (NASDAQ:CTAS). All of these stocks’ market caps resemble VRSK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TDG | 47 | 4062096 | -1 |
| VRSN | 30 | 4391236 | 1 |
| PANW | 46 | 2204328 | 0 |
| CTAS | 29 | 691809 | -2 |
| Average | 38 | 2837367 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $2837 million. That figure was $660 million in VRSK’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Cintas Corporation (NASDAQ:CTAS) is the least popular one with only 29 bullish hedge fund positions. Verisk Analytics, Inc. (NASDAQ:VRSK) is not the least popular stock in this group but hedge fund interest is still below average. Overall hedge fund sentiment is at an all time high but there is still a lot of room for this to grow. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on VRSK, though not to the same extent, as the stock returned 18% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
