IntercontinentalExchange Inc (ICE): Are Hedge Funds Right About This Stock?

IntercontinentalExchange Inc (NYSE:ICE) was in 35 hedge funds’ portfolio at the end of the first quarter of 2013. ICE investors should pay attention to an increase in support from the world’s most elite money managers of late. There were 34 hedge funds in our database with ICE holdings at the end of the previous quarter.

In the financial world, there are dozens of gauges shareholders can use to watch their holdings. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can beat the broader indices by a very impressive margin (see just how much).

Just as beneficial, bullish insider trading activity is a second way to break down the financial markets. There are a variety of reasons for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if investors understand what to do (learn more here).

Consequently, let’s take a gander at the recent action encompassing IntercontinentalExchange Inc (NYSE:ICE).

How have hedgies been trading IntercontinentalExchange Inc (NYSE:ICE)?

In preparation for this quarter, a total of 35 of the hedge funds we track were long in this stock, a change of 3% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, Highfields Capital Management, managed by Jonathon Jacobson, holds the most valuable position in IntercontinentalExchange Inc (NYSE:ICE). Highfields Capital Management has a $322.7 million position in the stock, comprising 2.9% of its 13F portfolio. The second largest stake is held by Doug Silverman and Alexander Klabin of Senator Investment Group, with a $260.9 million position; 3.1% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Andreas Halvorsen’s Viking Global, Jim Simons’s Renaissance Technologies and Kenneth Mario Garschina’s Mason Capital Management.

As aggregate interest increased, key hedge funds were breaking ground themselves. Viking Global, managed by Andreas Halvorsen, created the biggest position in IntercontinentalExchange Inc (NYSE:ICE). Viking Global had 222.9 million invested in the company at the end of the quarter. Kenneth Mario Garschina’s Mason Capital Management also initiated a $85.2 million position during the quarter. The following funds were also among the new ICE investors: Kenneth Mario Garschina’s Mason Capital Management, David Stemerman’s Conatus Capital Management, and John Lykouretzos’s Hoplite Capital Management.

What do corporate executives and insiders think about IntercontinentalExchange Inc (NYSE:ICE)?

Insider buying is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time frame, IntercontinentalExchange Inc (NYSE:ICE) has experienced zero unique insiders purchasing, and 12 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 IntercontinentalExchange Inc (NYSE:ICE). These stocks are Apollo Global Management LLC (NYSE:APO), CBOE Holdings, Inc (NASDAQ:CBOE), Ares Capital Corporation (NASDAQ:ARCC), NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), and NYSE Euronext (NYSE:NYX). All of these stocks are in the diversified investments industry and their market caps resemble ICE’s market cap.