At the moment, there are many gauges market participants can use to analyze Mr. Market. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can beat the broader indices by a solid amount (see just how much).
Just as beneficial, positive insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are many reasons for an executive to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).
Keeping this in mind, we’re going to take a look at the recent action regarding Solera Holdings Inc (NYSE:SLH).
Hedge fund activity in Solera Holdings Inc (NYSE:SLH)
At the end of the first quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 33% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably.
Of the funds we track, William von Mueffling’s Cantillon Capital Management had the most valuable position in Solera Holdings Inc (NYSE:SLH), worth close to $101.7 million, comprising 3.2% of its total 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Matthew Tewksbury’s Stevens Capital Management.
Consequently, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the largest position in Solera Holdings Inc (NYSE:SLH). Millennium Management had 6.1 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $1.6 million position during the quarter.
How are insiders trading Solera Holdings Inc (NYSE:SLH)?
Insider buying is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest half-year time frame, Solera Holdings Inc (NYSE:SLH) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Solera Holdings Inc (NYSE:SLH). These stocks are Aspen Technology, Inc. (NASDAQ:AZPN), Tibco Software Inc. (NASDAQ:TIBX), Total System Services, Inc. (NYSE:TSS), Informatica Corporation (NASDAQ:INFA), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). This group of stocks are in the business software & services industry and their market caps are similar to SLH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Aspen Technology, Inc. (NASDAQ:AZPN) | 19 | 0 | 8 |
| Tibco Software Inc. (NASDAQ:TIBX) | 30 | 0 | 5 |
| Total System Services, Inc. (NYSE:TSS) | 16 | 0 | 10 |
| Informatica Corporation (NASDAQ:INFA) | 27 | 5 | 9 |
| Jack Henry & Associates, Inc. (NASDAQ:JKHY) | 10 | 1 | 2 |
With the results demonstrated by the aforementioned research, everyday investors must always monitor hedge fund and insider trading activity, and Solera Holdings Inc (NYSE:SLH) is no exception.
