DFC Global Corp (DLLR): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

DFC Global Corp (NASDAQ:DLLR) has seen an increase in activity from the world’s largest hedge funds in recent months.

In the 21st century investor’s toolkit, there are many metrics shareholders can use to analyze stocks. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outpace the market by a solid amount (see just how much).

Equally as key, optimistic insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are a variety of incentives for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if piggybackers know what to do (learn more here).

Consequently, we’re going to take a peek at the recent action surrounding DFC Global Corp (NASDAQ:DLLR).

What have hedge funds been doing with DFC Global Corp (NASDAQ:DLLR)?

At the end of the first quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 11% from the first quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, John Murphy’s Alydar Capital had the biggest position in DFC Global Corp (NASDAQ:DLLR), worth close to $16.8 million, accounting for 1.1% of its total 13F portfolio. The second largest stake is held by Matthew Hulsizer of PEAK6 Capital Management, with a $11.8 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Ken Griffin’s Citadel Investment Group, David Dreman’s Dreman Value Management and Andy Redleaf’s Whitebox Advisors.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Dreman Value Management, managed by David Dreman, assembled the biggest position in DFC Global Corp (NASDAQ:DLLR). Dreman Value Management had 7.5 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.6 million position during the quarter. The only other fund with a new position in the stock is Matthew Tewksbury’s Stevens Capital Management.

What have insiders been doing with DFC Global Corp (NASDAQ:DLLR)?

Insider purchases made by high-level executives is at its handiest when the company in question has experienced transactions within the past half-year. Over the latest 180-day time period, DFC Global Corp (NASDAQ:DLLR) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to DFC Global Corp (NASDAQ:DLLR). These stocks are PHH Corporation (NYSE:PHH), World Acceptance Corp. (NASDAQ:WRLD), Global Cash Access Holdings, Inc. (NYSE:GCA), Fifth Street Finance Corp. (NASDAQ:FSC), and NewStar Financial Inc (NASDAQ:NEWS). This group of stocks are in the credit services industry and their market caps are closest to DLLR’s market cap.

With the returns exhibited by Insider Monkey’s tactics, retail investors must always monitor hedge fund and insider trading activity, and DFC Global Corp (NASDAQ:DLLR) applies perfectly to this mantra.

Click here to learn why you should track hedge funds