In the financial world, there are tons of indicators shareholders can use to analyze their holdings. Two of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outperform the broader indices by a healthy amount (see just how much).
Just as beneficial, optimistic insider trading activity is a second way to break down the investments you’re interested in. Obviously, there are lots of incentives for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the useful potential of this tactic if investors understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the latest action encompassing The First Marblehead Corporation (NYSE:FMD).
Hedge fund activity in The First Marblehead Corporation (NYSE:FMD)
At year’s end, a total of 6 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Phil Frohlich’s Prescott Group Capital Management had the biggest position in The First Marblehead Corporation (NYSE:FMD), worth close to $6.3 million, accounting for 1.6% of its total 13F portfolio. Sitting at the No. 2 spot is Nantahala Capital Management, managed by Wilmot B. Harkey and Daniel Mack, which held a $3.1 million position; 0.5% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Jim Simons’s Renaissance Technologies, Jay Petschek and Steven Major’s Corsair Capital Management and Jacob Gottlieb’s Visium Asset Management.
Because The First Marblehead Corporation (NYSE:FMD) has experienced a declination in interest from hedge fund managers, logic holds that there exists a select few money managers that slashed their full holdings at the end of the year. Interestingly, Paul Reeder and Edward Shapiro’s PAR Capital Management cut the biggest investment of the 450+ funds we track, worth close to $0.6 million in stock., and D. E. Shaw of D E Shaw was right behind this move, as the fund sold off about $0 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading The First Marblehead Corporation (NYSE:FMD)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past six months. Over the last six-month time frame, The First Marblehead Corporation (NYSE:FMD) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to The First Marblehead Corporation (NYSE:FMD). These stocks are Asset Acceptance Capital Corp. (NASDAQ:AACC), Nicholas Financial, Inc. (NASDAQ:NICK), Security National Financial Corp. (NASDAQ:SNFCA), Intervest Bancshares Corp (NASDAQ:IBCA), and MicroFinancial Incorporated (NASDAQ:MFI). This group of stocks are in the credit services industry and their market caps resemble FMD’s market cap.
