In the eyes of most shareholders, hedge funds are perceived as slow, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open today, we look at the leaders of this group, about 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their best stock picks, we have determined a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as beneficial, optimistic insider trading sentiment is another way to parse down the world of equities. Obviously, there are a variety of incentives for a bullish 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 where to look (learn more here).
With all of this in mind, it’s important to take a look at the recent action surrounding Insperity Inc (NYSE:NSP).
Hedge fund activity in Insperity Inc (NYSE:NSP)
Heading into Q2, a total of 13 of the hedge funds we track held long positions in this stock, a change of 18% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, Alexander Medina Seaver’s Stadium Capital Management had the largest position in Insperity Inc (NYSE:NSP), worth close to $72.4 million, comprising 16.2% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $3.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the largest position in Insperity Inc (NYSE:NSP). Millennium Management had 3 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How have insiders been trading Insperity Inc (NYSE:NSP)?
Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time frame, Insperity Inc (NYSE:NSP) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Insperity Inc (NYSE:NSP). These stocks are Team, Inc. (NYSE:TISI), InnerWorkings, Inc. (NASDAQ:INWK), LivePerson, Inc. (NASDAQ:LPSN), WNS (Holdings) Limited (ADR) (NYSE:WNS), and RPX Corp (NASDAQ:RPXC). All of these stocks are in the business services industry and their market caps are similar to NSP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Team, Inc. (NYSE:TISI) | 9 | 1 | 8 |
| InnerWorkings, Inc. (NASDAQ:INWK) | 9 | 2 | 1 |
| LivePerson, Inc. (NASDAQ:LPSN) | 7 | 4 | 1 |
| WNS (Holdings) Limited (ADR) (NYSE:WNS) | 6 | 0 | 0 |
| RPX Corp (NASDAQ:RPXC) | 11 | 1 | 9 |
With the results exhibited by Insider Monkey’s research, retail investors should always monitor hedge fund and insider trading activity, and Insperity Inc (NYSE:NSP) is an important part of this process.
