Is Tyler Technologies, Inc. (NYSE:TYL) a good investment?
In the eyes of many of your peers, hedge funds are perceived as overrated, outdated financial tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, Insider Monkey focuses on the masters of this group, close to 525 funds. It is widely held that this group has its hands on most of the smart money’s total assets, and by watching their highest quality investments, we’ve revealed a few investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 (see all of our picks from August).
Just as useful, positive insider trading activity is a second way to analyze the stock market universe. Just as you’d expect, there are a variety of reasons for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).
Now that that’s out of the way, it’s important to analyze the recent info for Tyler Technologies, Inc. (NYSE:TYL).
How are hedge funds trading Tyler Technologies, Inc. (NYSE:TYL)?
At Q2’s end, a total of 8 of the hedge funds we track were bullish in this stock, a change of -11% from the first quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.
According to our 13F database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Tyler Technologies, Inc. (NYSE:TYL). Renaissance Technologies has a $36.7 million position in the stock, comprising 0.1% of its 13F portfolio. On Renaissance Technologies’s heels is Mario Gabelli of GAMCO Investors, with a $24.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers with similar optimism include Cliff Asness’s AQR Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Judging by the fact that Tyler Technologies, Inc. (NYSE:TYL) has faced bearish sentiment from the smart money’s best and brightest, we can see that there is a sect of hedgies that elected to cut their full holdings last quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group said goodbye to the largest investment of all the hedgies we key on, totaling about $3 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $2.2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds last quarter.
What have insiders been doing with Tyler Technologies, Inc. (NYSE:TYL)?
Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, Tyler Technologies, Inc. (NYSE:TYL) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Tyler Technologies, Inc. (NYSE:TYL). These stocks are National Instruments Corp (NASDAQ:NATI), Concur Technologies, Inc. (NASDAQ:CNQR), PTC Inc (NASDAQ:PMTC), Mentor Graphics Corp (NASDAQ:MENT), and ACI Worldwide Inc (NASDAQ:ACIW). This group of stocks are in the technical & system software industry and their market caps are similar to TYL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| National Instruments Corp (NASDAQ:NATI) | 8 | 0 | 0 |
| Concur Technologies, Inc. (NASDAQ:CNQR) | 15 | 0 | 0 |
| PTC Inc (NASDAQ:PMTC) | 11 | 0 | 0 |
| Mentor Graphics Corp (NASDAQ:MENT) | 16 | 0 | 0 |
| ACI Worldwide Inc (NASDAQ:ACIW) | 17 | 0 | 0 |
Using the results shown by the previously mentioned strategies, average investors must always pay attention to hedge fund and insider trading activity, and Tyler Technologies, Inc. (NYSE:TYL) is no exception.
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