Hedge Funds Are Buying DigitalGlobe Inc (DGI)

DigitalGlobe Inc (NYSE:DGI) was in 33 hedge funds’ portfolio at the end of the first quarter of 2013. DGI investors should pay attention to an increase in hedge fund sentiment lately. There were 26 hedge funds in our database with DGI positions at the end of the previous quarter.

At the moment, there are plenty of metrics investors can use to analyze Mr. Market. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can outclass the S&P 500 by a superb amount (see just how much).

Just as beneficial, bullish insider trading sentiment is a second way to parse down the world of equities. Just as you’d expect, there are lots of reasons for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).

Keeping this in mind, let’s take a peek at the latest action encompassing DigitalGlobe Inc (NYSE:DGI).

What does the smart money think about DigitalGlobe Inc (NYSE:DGI)?

In preparation for this quarter, a total of 33 of the hedge funds we track were long in this stock, a change of 27% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, SAB Capital Management, managed by Brian Jackelow, holds the most valuable position in DigitalGlobe Inc (NYSE:DGI). SAB Capital Management has a $134.7 million position in the stock, comprising 10.6% of its 13F portfolio. Coming in second is James Dinan of York Capital Management, with a $77.3 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Stephen Feinberg’s Cerberus Capital Management, Christopher Pucillo’s Solus Alternative Asset Management and Mariko Gordon’s Daruma Asset Management.

With a general bullishness amongst the heavyweights, some big names have jumped into DigitalGlobe Inc (NYSE:DGI) headfirst. SAB Capital Management, managed by Brian Jackelow, initiated the most outsized position in DigitalGlobe Inc (NYSE:DGI). SAB Capital Management had 134.7 million invested in the company at the end of the quarter. Curtis Schenker and Craig Effron’s Scoggin also initiated a $19.3 million position during the quarter. The following funds were also among the new DGI investors: Ken Griffin’s Citadel Investment Group, Charles Anderson’s Fox Point Capital Management, and John Wu’s Sureview Capital.

Insider trading activity in DigitalGlobe Inc (NYSE:DGI)

Bullish insider trading is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, DigitalGlobe Inc (NYSE:DGI) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to DigitalGlobe Inc (NYSE:DGI). These stocks are FactSet Research Systems Inc. (NYSE:FDS), Dun & Bradstreet Corp (NYSE:DNB), Morningstar, Inc. (NASDAQ:MORN), DST Systems, Inc. (NYSE:DST), and Broadridge Financial Solutions, Inc. (NYSE:BR). This group of stocks belong to the information & delivery services industry and their market caps are closest to DGI’s market cap.