SAIC, Inc. (SAI): Are Hedge Funds Right About This Stock?

SAIC, Inc. (NYSE:SAI) was in 16 hedge funds’ portfolio at the end of March. SAI has seen a decrease in hedge fund sentiment of late. There were 20 hedge funds in our database with SAI holdings at the end of the previous quarter.

In today’s marketplace, there are a multitude of indicators investors can use to track stocks. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the S&P 500 by a solid amount (see just how much).

Equally as important, bullish insider trading sentiment is a second way to parse down the financial markets. Obviously, there are a number of stimuli for an insider to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).

Consequently, it’s important to take a gander at the recent action encompassing SAIC, Inc. (NYSE:SAI).

How have hedgies been trading SAIC, Inc. (NYSE:SAI)?

Heading into Q2, a total of 16 of the hedge funds we track were long in this stock, a change of -20% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the biggest position in SAIC, Inc. (NYSE:SAI). Iridian Asset Management has a $79.7 million position in the stock, comprising 1.2% of its 13F portfolio. On Iridian Asset Management’s heels is Crestwood Capital Management, managed by Michael R. Weisberg, which held a $27.7 million position; 3.4% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Gregg J. Powers’s Private Capital Management, Joel Greenblatt’s Gotham Asset Management and Michael Doheny’s Freshford Capital Management.

Since SAIC, Inc. (NYSE:SAI) has experienced declining sentiment from hedge fund managers, it’s safe to say that there were a few hedgies who sold off their entire stakes last quarter. At the top of the heap, Clint Carlson’s Carlson Capital dropped the largest position of the 450+ funds we track, worth close to $20.7 million in stock.. Eric Edidin and Josh Lobel’s fund, Archer Capital Management, also dropped its stock, about $16.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds last quarter.

What do corporate executives and insiders think about SAIC, Inc. (NYSE:SAI)?

Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the last half-year time period, SAIC, Inc. (NYSE:SAI) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to SAIC, Inc. (NYSE:SAI). These stocks are Jacobs Engineering Group Inc (NYSE:JEC), AECOM Technology Corp (NYSE:ACM), URS Corp (NYSE:URS), and KBR, Inc. (NYSE:KBR). This group of stocks belong to the technical services industry and their market caps are similar to SAI’s market cap.

With the results exhibited by Insider Monkey’s studies, retail investors should always keep an eye on hedge fund and insider trading activity, and SAIC, Inc. (NYSE:SAI) is an important part of this process.

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