In the 21st century investor’s toolkit, there are plenty of methods market participants can use to track their holdings. Two of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can beat their index-focused peers by a very impressive margin (see just how much).
Just as key, bullish insider trading activity is another way to break down the world of equities. As the old adage goes: there are lots of reasons for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this method if “monkeys” know where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the latest action encompassing HMS Holdings Corp. (NASDAQ:HMSY).
What have hedge funds been doing with HMS Holdings Corp. (NASDAQ:HMSY)?
Heading into Q2, a total of 10 of the hedge funds we track held long positions in this stock, a change of 11% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, Phill Gross and Robert Atchinson’s Adage Capital Management had the most valuable position in HMS Holdings Corp. (NASDAQ:HMSY), worth close to $12.3 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Steven Cohen of SAC Capital Advisors, with a $7.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Israel Englander’s Millennium Management, Matthew Tewksbury’s Stevens Capital Management and Barton Biggs’s Traxis Partners.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the largest position in HMS Holdings Corp. (NASDAQ:HMSY). Adage Capital Management had 12.3 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $2.2 million position during the quarter. The other funds with new positions in the stock are Barton Biggs’s Traxis Partners, J. Alan Reid, Jr.’s Forward Management, and Cliff Asness’s AQR Capital Management.
How have insiders been trading HMS Holdings Corp. (NASDAQ:HMSY)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time frame, HMS Holdings Corp. (NASDAQ:HMSY) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to HMS Holdings Corp. (NASDAQ:HMSY). These stocks are Deluxe Corporation (NYSE:DLX), Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), Lender Processing Services, Inc. (NYSE:LPS), RR Donnelley & Sons Co (NASDAQ:RRD), and Ritchie Bros. Auctioneers (USA) (NYSE:RBA). All of these stocks are in the business services industry and their market caps are closest to HMSY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Deluxe Corporation (NYSE:DLX) | 12 | 0 | 7 |
| Portfolio Recovery Associates, Inc. (NASDAQ:PRAA) | 4 | 0 | 7 |
| Lender Processing Services, Inc. (NYSE:LPS) | 23 | 0 | 0 |
| RR Donnelley & Sons Co (NASDAQ:RRD) | 23 | 0 | 0 |
| Ritchie Bros. Auctioneers (USA) (NYSE:RBA) | 4 | 0 | 0 |
With the returns exhibited by our tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and HMS Holdings Corp. (NASDAQ:HMSY) is no exception.
