Hedge Funds & Insiders Are Taking Profits At NCR Corporation (NCR)

NCR Corporation (NYSE:NCR) has returned over 44% year-to-date, but it’s worth asking the question: should investors take profits now?

In the 21st century investor’s toolkit, there are many methods investors can use to watch the equity markets. Two of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outperform their index-focused peers by a healthy amount (see just how much).

Just as crucial, optimistic insider trading activity is a second way to analyze the stock market universe. Obviously, there are plenty of reasons for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this method if “monkeys” understand what to do (learn more here).

Keeping this in mind, we’re going to discuss the latest info surrounding NCR Corporation (NYSE:NCR).

What does the smart money think about NCR Corporation (NYSE:NCR)?

At Q2’s end, a total of 28 of the hedge funds we track held long positions in this stock, a change of -18% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.

When using filings from the hedgies we track, Greenlight Capital, managed by David Einhorn, holds the largest position in NCR Corporation (NYSE:NCR). Greenlight Capital has a $304.7 million position in the stock, comprising 5.7% of its 13F portfolio. Coming in second is Marcato Capital Management, managed by Richard McGuire, which held a $211.5 million position; the fund has 20.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Eric Bannasch’s Cadian Capital, Ken Fisher’s Fisher Asset Management and D. E. Shaw’s D E Shaw.

Judging by the fact that NCR Corporation (NYSE:NCR) has witnessed declining interest from the smart money’s best and brightest, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their full holdings heading into Q2. Interestingly, Israel Englander’s Millennium Management said goodbye to the largest position of the 450+ funds we track, totaling an estimated $19.5 million in stock. SAC Subsidiary’s fund, Sigma Capital Management, also dropped its stock, about $6.9 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 6 funds heading into Q2.

What have insiders been doing with NCR Corporation (NYSE:NCR)?

Legal insider trading, particularly when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time frame, NCR Corporation (NYSE:NCR) has experienced zero unique insiders purchasing, and 8 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 NCR Corporation (NYSE:NCR). These stocks are Computer Sciences Corporation (NYSE:CSC), Rackspace Hosting, Inc. (NYSE:RAX), Syntel, Inc. (NASDAQ:SYNT), Gartner Inc (NYSE:IT), and ServiceNow Inc (NYSE:NOW). This group of stocks belong to the information technology services industry and their market caps are closest to NCR’s market cap.

Using the returns explained by our tactics, average investors should always watch hedge fund and insider trading activity, and NCR Corporation (NYSE:NCR) applies perfectly to this mantra.

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