Hercules Technology Growth Capital Inc (NYSE:HTGC) was in 5 hedge funds’ portfolio at the end of December. HTGC has seen a decrease in activity from the world’s largest hedge funds recently. There were 7 hedge funds in our database with HTGC positions at the end of the previous quarter.
To most market participants, hedge funds are seen as unimportant, old financial vehicles of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey hone in on the upper echelon of this club, around 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total asset base, and by keeping an eye on their best stock picks, we have determined a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 24 percentage points in 7 months (see all of our picks from August).
Just as integral, positive insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are lots of reasons for an insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this strategy if investors know where to look (learn more here).
Consequently, we’re going to take a glance at the key action surrounding Hercules Technology Growth Capital Inc (NYSE:HTGC).
How are hedge funds trading Hercules Technology Growth Capital Inc (NYSE:HTGC)?
In preparation for this year, a total of 5 of the hedge funds we track were long in this stock, a change of -29% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, Amy Minella’s Cardinal Capital had the largest position in Hercules Technology Growth Capital Inc (NYSE:HTGC), worth close to $14.9 million, comprising 1% of its total 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $1.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Bruce Kovner’s Caxton Associates LP.
Judging by the fact that Hercules Technology Growth Capital Inc (NYSE:HTGC) has faced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of hedgies that elected to cut their positions entirely heading into 2013. At the top of the heap, Israel Englander’s Millennium Management dumped the largest investment of the 450+ funds we track, worth close to $1.5 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also dumped its stock, about $0.8 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 2 funds heading into 2013.
How have insiders been trading Hercules Technology Growth Capital Inc (NYSE:HTGC)?
Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time period, Hercules Technology Growth Capital Inc (NYSE:HTGC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Hercules Technology Growth Capital Inc (NYSE:HTGC). These stocks are Home Loan Servicing Solutions Ltd (NASDAQ:HLSS), Arlington Asset Investment Corp (NYSE:AI), Ellington Financial LLC (NYSE:EFC), Western Asset Mortgage Capital Corp (NYSE:WMC), and HFF, Inc. (NYSE:HF). This group of stocks belong to the mortgage investment industry and their market caps are similar to HTGC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Home Loan Servicing Solutions Ltd (NASDAQ:HLSS) | 21 | 4 | 0 |
| Arlington Asset Investment Corp (NYSE:AI) | 6 | 0 | 0 |
| Ellington Financial LLC (NYSE:EFC) | 5 | 0 | 1 |
| Western Asset Mortgage Capital Corp (NYSE:WMC) | 12 | 3 | 0 |
| HFF, Inc. (NYSE:HF) | 3 | 0 | 1 |
With the results demonstrated by the aforementioned time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and Hercules Technology Growth Capital Inc (NYSE:HTGC) applies perfectly to this mantra.
