Hedge Funds Are Dumping Insperity Inc (NSP)

What’s a smart Insperity Inc (NYSE:NSP) investor to do?

To many investors, hedge funds are viewed as bloated, old financial vehicles of a forgotten age. Although there are more than 8,000 hedge funds in operation in present day, Insider Monkey aim at the aristocrats of this club, about 525 funds. It is widely held that this group has its hands on most of the hedge fund industry’s total assets, and by monitoring their best investments, we’ve revealed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 33 percentage points in 11 months (explore the details and some picks here).

Equally as key, bullish insider trading sentiment is a second way to analyze the marketplace. As the old adage goes: there are a number of motivations for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).

What’s more, we’re going to discuss the recent info for Insperity Inc (NYSE:NSP).

Hedge fund activity in Insperity Inc (NYSE:NSP)

At Q2’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of -15% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings considerably.

According to our 13F database, Stadium Capital Management, managed by Alexander Medina Seaver, holds the largest position in Insperity Inc (NYSE:NSP). Stadium Capital Management has a $80.1 million position in the stock, comprising 20.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $5.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Because Insperity Inc (NYSE:NSP) has witnessed a fall in interest from upper-tier hedge fund managers, logic holds that there is a sect of hedge funds that elected to cut their positions entirely in Q1. It’s worth mentioning that Neil Chriss’s Hutchin Hill Capital sold off the biggest stake of the 450+ funds we watch, comprising about $0.6 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dumped its stock, about $0.3 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds in Q1.

How have insiders been trading Insperity Inc (NYSE:NSP)?

Legal insider trading, particularly when it’s bullish, is best served when the primary stock in question has experienced transactions within the past six months. Over the last six-month time period, Insperity Inc (NYSE:NSP) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators 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.

Using the returns explained by Insider Monkey’s tactics, average investors should always watch hedge fund and insider trading sentiment, and Insperity Inc (NYSE:NSP) is an important part of this process.

Discover how hedge fund piggybacking can benefit you