Convergys Corporation (CVG): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

Now, according to many traders, hedge funds are viewed as delayed, outdated financial tools of a period lost to current times. Although there are more than 8,000 hedge funds trading today, this site aim at the leaders of this group, close to 525 funds. Analysts calculate that this group controls most of all hedge funds’ total capital, and by keeping an eye on their highest performing investments, we’ve brought to light 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 annually 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as crucial, optimistic insider trading sentiment is a second way to analyze the investments you’re interested in. Obviously, there are many motivations for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this method if “monkeys” know what to do (learn more here).

Furthermore, we’re going to examine the latest info surrounding Convergys Corporation (NYSE:CVG).

How have hedgies been trading Convergys Corporation (NYSE:CVG)?

At the end of the second quarter, a total of 12 of the hedge funds we track held long positions in this stock, a change of 9% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.

According to our 13F database, Chuck Royce’s Royce & Associates had the largest position in Convergys Corporation (NYSE:CVG), worth close to $128.2 million, comprising 0.4% of its total 13F portfolio. Coming in second is Amy Minella of Cardinal Capital, with a $48.2 million position; 3.1% of its 13F portfolio is allocated to the company. Other peers that are bullish include Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the titans, certain bigger names were leading the bulls’ herd. Royce & Associates, managed by Chuck Royce, assembled the most valuable position in Convergys Corporation (NYSE:CVG). Royce & Associates had 128.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $93.6 million position during the quarter. The following funds were also among the new CVG investors: Amy Minella’s Cardinal Capital, Cliff Asness’s AQR Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

How are insiders trading Convergys Corporation (NYSE:CVG)?

Insider buying is at its handiest when the company in question has seen transactions within the past half-year. Over the latest six-month time frame, Convergys Corporation (NYSE:CVG) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Convergys Corporation (NYSE:CVG). These stocks are SS and C Technologies Holdings Inc (NASDAQ:SSNC), Qlik Technologies Inc (NASDAQ:QLIK), Guidewire Software Inc (NYSE:GWRE), Sapient Corporation (NASDAQ:SAPE), and Verint Systems Inc. (NASDAQ:VRNT). This group of stocks belong to the business software & services industry and their market caps match CVG’s market cap.

Using the results shown by Insider Monkey’s analyses, average investors should always watch hedge fund and insider trading activity, and Convergys Corporation (NYSE:CVG) shareholders fit into this picture quite nicely.

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