Should WisdomTree Investments, Inc. (NASDAQ:WETF) investors track the following data?
Now, according to many of your peers, hedge funds are perceived as bloated, outdated financial vehicles of a forgotten age. Although there are more than 8,000 hedge funds in operation in present day, this site looks at the moguls of this group, around 525 funds. It is assumed that this group controls the majority of the smart money’s total capital, and by monitoring their highest quality picks, we’ve formulated a few investment strategies that have historically outstripped the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as crucial, positive insider trading sentiment is another way to analyze the marketplace. Just as you’d expect, there are a number of stimuli for an insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
Keeping this in mind, let’s study the recent info about WisdomTree Investments, Inc. (NASDAQ:WETF).
How are hedge funds trading WisdomTree Investments, Inc. (NASDAQ:WETF)?
Heading into Q3, a total of 16 of the hedge funds we track held long positions in this stock, a change of -6% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
As WisdomTree Investments, Inc. (NASDAQ:WETF) has experienced declining interest from upper-tier hedge fund managers, we can see that there exists a select few hedge funds that decided to sell off their entire stakes in Q1. At the top of the heap, Anand Parekh’s Alyeska Investment Group dumped the biggest position of the 450+ funds we track, totaling an estimated $9.4 million in stock. SAC Subsidiary’s fund, CR Intrinsic Investors, also cut its stock, about $1.9 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in Q1.
What do corporate executives and insiders think about WisdomTree Investments, Inc. (NASDAQ:WETF)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past half-year. Over the last half-year time frame, WisdomTree Investments, Inc. (NASDAQ:WETF) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to WisdomTree Investments, Inc. (NASDAQ:WETF). These stocks are Financial Engines Inc (NASDAQ:FNGN), Cohen & Steers, Inc. (NYSE:CNS), Virtus Investment Partners Inc (NASDAQ:VRTS), Gamco Investors Inc. (NYSE:GBL), and Evercore Partners Inc. (NYSE:EVR). All of these stocks are in the asset management industry and their market caps are closest to WETF’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Financial Engines Inc (NASDAQ:FNGN) | 8 | 0 | 0 |
| Cohen & Steers, Inc. (NYSE:CNS) | 6 | 0 | 0 |
| Virtus Investment Partners Inc (NASDAQ:VRTS) | 13 | 0 | 0 |
| Gamco Investors Inc. (NYSE:GBL) | 5 | 0 | 0 |
| Evercore Partners Inc. (NYSE:EVR) | 13 | 0 | 0 |
Using the returns shown by the previously mentioned studies, average investors should always pay attention to hedge fund and insider trading activity, and WisdomTree Investments, Inc. (NASDAQ:WETF) applies perfectly to this mantra.
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WisdomTree Investments, Inc. (WETF): Are Hedge Funds Right About This Stock?
