Viad Corp (NYSE:VVI) investors should be aware of a decrease in hedge fund interest of late.
To most shareholders, hedge funds are perceived as worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at present, we look at the leaders of this group, around 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by monitoring their highest performing stock picks, we have deciphered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced 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 23.3 percentage points in 8 months (see all of our picks from August).
Equally as integral, bullish insider trading activity is a second way to break down the financial markets. Just as you’d expect, there are lots of stimuli for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Many empirical studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).
Keeping this in mind, we’re going to take a look at the latest action encompassing Viad Corp (NYSE:VVI).
What have hedge funds been doing with Viad Corp (NYSE:VVI)?
At the end of the first quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes considerably.
Because Viad Corp (NYSE:VVI) has witnessed a declination in interest from the smart money, we can see that there exists a select few funds that slashed their full holdings heading into Q2. Intriguingly, Jeffrey Smith’s Starboard Value LP said goodbye to the largest position of the “upper crust” of funds we monitor, comprising an estimated $15.6 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund dropped about $0.6 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Viad Corp (NYSE:VVI)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time frame, Viad Corp (NYSE:VVI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Viad Corp (NYSE:VVI). These stocks are Examworks Group, Inc. (NYSE:EXAM), COMSCORE, Inc. (NASDAQ:SCOR), Performant Financial Corp (NASDAQ:PFMT), Websense Inc. (NASDAQ:WBSN), and Envestnet Inc (NYSE:ENV). All of these stocks are in the business services industry and their market caps are similar to VVI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Examworks Group, Inc. (NYSE:EXAM) | 10 | 2 | 1 |
| COMSCORE, Inc. (NASDAQ:SCOR) | 10 | 0 | 1 |
| Performant Financial Corp (NASDAQ:PFMT) | 4 | 1 | 10 |
| Websense Inc. (NASDAQ:WBSN) | 17 | 0 | 2 |
| Envestnet Inc (NYSE:ENV) | 6 | 0 | 2 |
With the results demonstrated by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Viad Corp (NYSE:VVI) shareholders fit into this picture quite nicely.
