Heidrick & Struggles International, Inc. (NASDAQ:HSII) investors should pay attention to a decrease in hedge fund sentiment in recent months.
According to most stock holders, hedge funds are seen as underperforming, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading today, we at Insider Monkey hone in on the elite of this club, about 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total capital, and by monitoring their top investments, we have unearthed a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as integral, optimistic insider trading sentiment is another way to break down the world of equities. Just as you’d expect, there are a variety of motivations for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this tactic if “monkeys” know where to look (learn more here).
With all of this in mind, let’s take a peek at the recent action surrounding Heidrick & Struggles International, Inc. (NASDAQ:HSII).
Hedge fund activity in Heidrick & Struggles International, Inc. (NASDAQ:HSII)
Heading into Q2, a total of 8 of the hedge funds we track were long in this stock, a change of -20% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Heidrick & Struggles International, Inc. (NASDAQ:HSII), worth close to $8.6 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Basswood Capital, managed by Matthew Lindenbaum, which held a $3.6 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management and Matthew Tewksbury’s Stevens Capital Management.
Judging by the fact that Heidrick & Struggles International, Inc. (NASDAQ:HSII) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of money managers who sold off their entire stakes last quarter. Interestingly, Ken Griffin’s Citadel Investment Group dropped the biggest stake of all the hedgies we monitor, valued at close to $0.6 million in stock., and Charles Davidson of Wexford Capital was right behind this move, as the fund cut about $0.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
Insider trading activity in Heidrick & Struggles International, Inc. (NASDAQ:HSII)
Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, Heidrick & Struggles International, Inc. (NASDAQ:HSII) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s research, retail investors should always monitor hedge fund and insider trading sentiment, and Heidrick & Struggles International, Inc. (NASDAQ:HSII) shareholders fit into this picture quite nicely.