Eaton Vance Corp (EV): Insiders Are Dumping, Should You?: Och-Ziff Capital Management Group LLC (OZM), Legg Mason, Inc. (LM)

Is Eaton Vance Corp (NYSE:EV) a bargain? Money managers are in an optimistic mood. The number of bullish hedge fund positions increased by 1 in recent months.

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Just as key, positive insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are lots of incentives for an insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this tactic if piggybackers understand what to do (learn more here).

Consequently, let’s take a look at the latest action regarding Eaton Vance Corp (NYSE:EV).

What have hedge funds been doing with Eaton Vance Corp (NYSE:EV)?

Heading into 2013, a total of 8 of the hedge funds we track were bullish in this stock, a change of 14% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Eaton Vance Corp (NYSE:EV), worth close to $7 million, comprising 0% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $3 million position; 0% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include John A. Levin’s Levin Capital Strategies, Cliff Asness’s AQR Capital Management and Steven Cohen’s SAC Capital Advisors.

Now, specific money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the most valuable position in Eaton Vance Corp (NYSE:EV). Renaissance Technologies had 7 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a less than $1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Paul Tudor Jones’s Tudor Investment Corp.

What do corporate executives and insiders think about Eaton Vance Corp (NYSE:EV)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Eaton Vance Corp (NYSE:EV) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Eaton Vance Corp (NYSE:EV). These stocks are Och-Ziff Capital Management Group LLC (NYSE:OZM), Legg Mason, Inc. (NYSE:LM), Lazard Ltd (NYSE:LAZ), American Capital Ltd. (NASDAQ:ACAS), and SEI Investments Company (NASDAQ:SEIC). This group of stocks belong to the asset management industry and their market caps resemble EV’s market cap.

With the returns exhibited by our tactics, retail investors must always monitor hedge fund and insider trading activity, and Eaton Vance Corp (NYSE:EV) is an important part of this process.

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