After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Verisk Analytics, Inc. (NASDAQ:VRSK).
Verisk Analytics, Inc. (NASDAQ:VRSK) shareholders have witnessed a decrease in hedge fund interest in recent months. VRSK was in 23 hedge funds’ portfolios at the end of September. There were 28 hedge funds in our database with VRSK positions at the end of the previous quarter. Our calculations also showed that VRSK isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to go over the key hedge fund action encompassing Verisk Analytics, Inc. (NASDAQ:VRSK).
What does the smart money think about Verisk Analytics, Inc. (NASDAQ:VRSK)?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. By comparison, 27 hedge funds held shares or bullish call options in VRSK heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Verisk Analytics, Inc. (NASDAQ:VRSK) was held by Akre Capital Management, which reported holding $306.6 million worth of stock at the end of September. It was followed by Diamond Hill Capital with a $178.3 million position. Other investors bullish on the company included Farallon Capital, Two Creeks Capital Management, and Arrowstreet Capital.
Since Verisk Analytics, Inc. (NASDAQ:VRSK) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there is a sect of funds who were dropping their full holdings in the third quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies sold off the biggest investment of all the hedgies monitored by Insider Monkey, totaling close to $28 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $21.6 million worth. These transactions are important to note, as total hedge fund interest fell by 5 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Verisk Analytics, Inc. (NASDAQ:VRSK) but similarly valued. These stocks are DTE Energy Company (NYSE:DTE), Tenaris S.A. (NYSE:TS), Regions Financial Corporation (NYSE:RF), and TransDigm Group Incorporated (NYSE:TDG). This group of stocks’ market values match VRSK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DTE | 25 | 706241 | 5 |
| TS | 18 | 686842 | -2 |
| RF | 31 | 951749 | -10 |
| TDG | 48 | 3883567 | 7 |
| Average | 30.5 | 1557100 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $1.56 billion. That figure was $902 million in VRSK’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Tenaris S.A. (NYSE:TS) is the least popular one with only 18 bullish hedge fund positions. Verisk Analytics, Inc. (NASDAQ:VRSK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TDG might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
