Is SLM Corp (NASDAQ:SLM) worth buying now?
Now, according to many investors, hedge funds are assumed to be overrated, old investment tools of a period lost to current times. Although there are more than 8,000 hedge funds trading today, this site looks at the upper echelon of this group, about 525 funds. It is widely held that this group controls most of the smart money’s total assets, and by monitoring their best stock picks, we’ve spotted a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as crucial, positive insider trading activity is a second way to analyze the marketplace. There are many incentives for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, let’s analyze the newest info for SLM Corp (NASDAQ:SLM).
How are hedge funds trading SLM Corp (NASDAQ:SLM)?
At Q2’s end, a total of 32 of the hedge funds we track were long in this stock, a change of 7% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
Out of the hedge funds we follow, Jonathon Jacobson’s Highfields Capital Management had the largest position in SLM Corp (NASDAQ:SLM), worth close to $577 million, comprising 4.8% of its total 13F portfolio. On Highfields Capital Management’s heels is David Abrams of Abrams Capital Management, with a $348.6 million position; the fund has 20.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Leon Cooperman’s Omega Advisors, D. E. Shaw’s D E Shaw and Donald Chiboucis’s Columbus Circle Investors.
As one would understandably expect, particular hedge funds were breaking ground themselves. Highfields Capital Management, managed by Jonathon Jacobson, assembled the biggest position in SLM Corp (NASDAQ:SLM). Highfields Capital Management had 577 million invested in the company at the end of the quarter. David Abrams’s Abrams Capital Management also made a $348.6 million investment in the stock during the quarter. The following funds were also among the new SLM investors: Leon Cooperman’s Omega Advisors, D. E. Shaw’s D E Shaw, and Donald Chiboucis’s Columbus Circle Investors.
Insider trading activity in SLM Corp (NASDAQ:SLM)
Insider buying made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time frame, SLM Corp (NASDAQ:SLM) has seen zero unique insiders buying, and 5 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 SLM Corp (NASDAQ:SLM). These stocks are Discover Financial Services (NYSE:DFS), ORIX Corporation (ADR) (NYSE:IX), Equifax Inc. (NYSE:EFX), The Western Union Company (NYSE:WU), and CIT Group Inc. (NYSE:CIT). This group of stocks are the members of the credit services industry and their market caps resemble SLM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Discover Financial Services (NYSE:DFS) | 47 | 0 | 5 |
| ORIX Corporation (ADR) (NYSE:IX) | 5 | 0 | 0 |
| Equifax Inc. (NYSE:EFX) | 25 | 1 | 11 |
| The Western Union Company (NYSE:WU) | 32 | 1 | 0 |
| CIT Group Inc. (NYSE:CIT) | 39 | 0 | 0 |
Using the results explained by the previously mentioned studies, regular investors should always pay attention to hedge fund and insider trading sentiment, and SLM Corp (NASDAQ:SLM) applies perfectly to this mantra.
