Computer Sciences Corporation (CSC): Are Hedge Funds Right About This Stock?

Computer Sciences Corporation (NYSE:CSC) has experienced an increase in hedge fund sentiment in recent months.

To most shareholders, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are over 8000 funds with their doors open today, we at Insider Monkey choose to focus on the masters of this group, around 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total capital, and by tracking their highest performing investments, we have come up with 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as key, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a variety of stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if you know where to look (learn more here).

Now, we’re going to take a gander at the key action surrounding Computer Sciences Corporation (NYSE:CSC).

How have hedgies been trading Computer Sciences Corporation (NYSE:CSC)?

In preparation for this quarter, a total of 26 of the hedge funds we track were bullish in this stock, a change of 4% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, David Einhorn’s Greenlight Capital had the most valuable position in Computer Sciences Corporation (NYSE:CSC), worth close to $291.3 million, accounting for 4.4% of its total 13F portfolio. Sitting at the No. 2 spot is Glenview Capital, managed by Larry Robbins, which held a $139.8 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Donald Chiboucis’s Columbus Circle Investors.

As one would reasonably expect, some big names were breaking ground themselves. Bridgewater Associates, managed by Ray Dalio, assembled the most valuable position in Computer Sciences Corporation (NYSE:CSC). Bridgewater Associates had 1.6 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Matthew Tewksbury’s Stevens Capital Management.

How have insiders been trading Computer Sciences Corporation (NYSE:CSC)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, Computer Sciences Corporation (NYSE:CSC) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Computer Sciences Corporation (NYSE:CSC). These stocks are NCR Corporation (NYSE:NCR), ServiceNow Inc (NYSE:NOW), Xerox Corporation (NYSE:XRX), Gartner Inc (NYSE:IT), and Rackspace Hosting, Inc. (NYSE:RAX). This group of stocks are the members of the information technology services industry and their market caps resemble CSC’s market cap.

With the returns shown by Insider Monkey’s strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Computer Sciences Corporation (NYSE:CSC) applies perfectly to this mantra.

Click here to learn why you should track hedge funds