Should You Buy LPL Financial Holdings Inc (LPLA)?

Is it smart to be bullish on LPL Financial Holdings Inc (NASDAQ:LPLA)?

In the financial world, there are dozens of metrics market participants can use to monitor publicly traded companies. Two of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outpace the market by a superb margin (see just how much).

Equally as crucial, optimistic insider trading activity is a second way to look at the stock market universe. There are lots of stimuli for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know where to look (learn more here).

What’s more, it’s important to study the newest info surrounding LPL Financial Holdings Inc (NASDAQ:LPLA).

How are hedge funds trading LPL Financial Holdings Inc (NASDAQ:LPLA)?

In preparation for the third quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 7% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly.

According to our 13F database, FPR Partners, managed by Bob Peck and Andy Raab, holds the most valuable position in LPL Financial Holdings Inc (NASDAQ:LPLA). FPR Partners has a $278.7 million position in the stock, comprising 11.3% of its 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $88 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that hold long positions include Charles Akre’s Akre Capital Management, James A. Noonan’s Pivot Point Capital and D. E. Shaw’s D E Shaw.

With a general bullishness amongst the titans, certain money managers were breaking ground themselves. FPR Partners, managed by Bob Peck and Andy Raab, initiated the biggest position in LPL Financial Holdings Inc (NASDAQ:LPLA). FPR Partners had 278.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $88 million position during the quarter. The other funds with new positions in the stock are Charles Akre’s Akre Capital Management, James A. Noonan’s Pivot Point Capital, and D. E. Shaw’s D E Shaw.

What do corporate executives and insiders think about LPL Financial Holdings Inc (NASDAQ:LPLA)?

Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the last six-month time period, LPL Financial Holdings Inc (NASDAQ:LPLA) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to LPL Financial Holdings Inc (NASDAQ:LPLA). These stocks are BGC Partners, Inc. (NASDAQ:BGCP), Interactive Brokers Group, Inc. (NASDAQ:IBKR), TD Ameritrade Holding Corp. (NYSE:AMTD), MarketAxess Holdings Inc. (NASDAQ:MKTX), and E TRADE Financial Corporation (NASDAQ:ETFC). All of these stocks are in the investment brokerage – national industry and their market caps are closest to LPLA’s market cap.

Using the returns demonstrated by our studies, average investors should always keep one eye on hedge fund and insider trading sentiment, and LPL Financial Holdings Inc (NASDAQ:LPLA) is no exception.

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