Should NetSpend Holdings Inc (NASDAQ:NTSP) investors track the following data?
In the eyes of many traders, hedge funds are seen as overrated, outdated financial vehicles of an era lost to time. Although there are over 8,000 hedge funds trading today, this site aim at the top tier of this group, close to 525 funds. Analysts calculate that this group oversees the majority of all hedge funds’ total assets, and by tracking their best investments, we’ve determined a number of investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, bullish insider trading activity is a second way to analyze the world of equities. As the old adage goes: there are a number of incentives for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).
Thus, let’s analyze the newest info for NetSpend Holdings Inc (NASDAQ:NTSP).
Hedge fund activity in NetSpend Holdings Inc (NASDAQ:NTSP)
At Q2’s end, a total of 15 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully.
According to our 13F database, Joel Ramin’s 12 West Capital Management had the largest position in NetSpend Holdings Inc (NASDAQ:NTSP), worth close to $94.2 million, comprising 15% of its total 13F portfolio. On 12 West Capital Management’s heels is Cliff Asness of AQR Capital Management, with a $29.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Robert Emil Zoellner’s Alpine Associates, Shane Finemore’s Manikay Partners and Jim Simons’s Renaissance Technologies.
Judging by the fact that NetSpend Holdings Inc (NASDAQ:NTSP) has witnessed bearish sentiment from the smart money’s best and brightest, logic holds that there lies a certain “tier” of funds who were dropping their entire stakes last quarter. Interestingly, Matthew Tewksbury’s Stevens Capital Management sold off the biggest position of the 450+ funds we key on, worth about $9.4 million in stock. Paul Glazer’s fund, Glazer Capital, also sold off its stock, about $4.2 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in NetSpend Holdings Inc (NASDAQ:NTSP)
Legal insider trading, particularly when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, NetSpend Holdings Inc (NASDAQ:NTSP) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to NetSpend Holdings Inc (NASDAQ:NTSP). These stocks are Atlas Resource Partners, L.P. (NYSE:ARP), Infoblox Inc (NYSE:BLOX), ExlService Holdings, Inc. (NASDAQ:EXLS), Quad/Graphics, Inc. (NYSE:QUAD), and TeleTech Holdings, Inc. (NASDAQ:TTEC). All of these stocks are in the business services industry and their market caps resemble NTSP’s market cap.
