In the 21st century investor’s toolkit, there are plenty of gauges shareholders can use to monitor the equity markets. A couple of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the broader indices by a very impressive amount (see just how much).
Just as important, positive insider trading activity is another way to parse down the world of equities. As the old adage goes: there are a variety of stimuli for an executive to drop shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the valuable potential of this tactic if investors understand where to look (learn more here).
Now, it’s important to take a look at the recent action encompassing Financial Engines Inc (NASDAQ:FNGN).
What does the smart money think about Financial Engines Inc (NASDAQ:FNGN)?
At year’s end, a total of 5 of the hedge funds we track held long positions in this stock, a change of 150% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Drew Cupps’s Cupps Capital Management had the largest position in Financial Engines Inc (NASDAQ:FNGN), worth close to $18.9 million, comprising 2.1% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $2.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Richard Driehaus’s Driehaus Capital, Mike Vranos’s Ellington and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, created the most valuable position in Financial Engines Inc (NASDAQ:FNGN). Driehaus Capital had 0.9 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.6 million investment in the stock during the quarter. The other funds with brand new FNGN positions are Ken Griffin’s Citadel Investment Group.
How are insiders trading Financial Engines Inc (NASDAQ:FNGN)?
Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, Financial Engines Inc (NASDAQ:FNGN) has seen zero unique insiders buying, and 12 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Financial Engines Inc (NASDAQ:FNGN). These stocks are WisdomTree Investments, Inc. (NASDAQ:WETF), Gamco Investors Inc. (NYSE:GBL), Virtus Investment Partners Inc (NASDAQ:VRTS), Cohen & Steers, Inc. (NYSE:CNS), and Janus Capital Group Inc (NYSE:JNS). This group of stocks are in the asset management industry and their market caps are closest to FNGN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| WisdomTree Investments, Inc. (NASDAQ:WETF) | 9 | 0 | 10 |
| Gamco Investors Inc. (NYSE:GBL) | 6 | 1 | 1 |
| Virtus Investment Partners Inc (NASDAQ:VRTS) | 7 | 0 | 5 |
| Cohen & Steers, Inc. (NYSE:CNS) | 5 | 0 | 2 |
| Janus Capital Group Inc (NYSE:JNS) | 11 | 1 | 5 |
With the results shown by our studies, retail investors should always monitor hedge fund and insider trading sentiment, and Financial Engines Inc (NASDAQ:FNGN) is no exception.
