To many traders, hedge funds are viewed as delayed, outdated financial tools of a period lost to current times. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey looks at the aristocrats of this group, around 525 funds. It is assumed that this group controls the majority of the hedge fund industry’s total capital, and by tracking their highest performing stock picks, we’ve come up with a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as necessary, optimistic insider trading activity is a second way to analyze the investments you’re interested in. Just as you’d expect, there are a number of motivations for an executive to get rid of shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
Now that that’s out of the way, we’re going to examine the recent info about Sykes Enterprises, Incorporated (NASDAQ:SYKE).
How have hedgies been trading Sykes Enterprises, Incorporated (NASDAQ:SYKE)?
Heading into Q3, a total of 14 of the hedge funds we track were long in this stock, a change of 8% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully.
Out of the hedge funds we follow, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Sykes Enterprises, Incorporated (NASDAQ:SYKE). Royce & Associates has a $14.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Royce & Associates’s heels is Ken Grossman and Glen Schneider of SG Capital Management, with a $6 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
With a general bullishness amongst the titans, particular hedge funds have been driving this bullishness. Royce & Associates, managed by Chuck Royce, established the most outsized position in Sykes Enterprises, Incorporated (NASDAQ:SYKE). Royce & Associates had 14.1 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also made a $6 million investment in the stock during the quarter. The other funds with brand new SYKE positions are Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors.
How have insiders been trading Sykes Enterprises, Incorporated (NASDAQ:SYKE)?
Legal insider trading, particularly when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Sykes Enterprises, Incorporated (NASDAQ:SYKE) 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 Sykes Enterprises, Incorporated (NASDAQ:SYKE). These stocks are Unisys Corporation (NYSE:UIS), EPIQ Systems, Inc. (NASDAQ:EPIQ), 21Vianet Group Inc (NASDAQ:VNET), Virtusa Corporation (NASDAQ:VRTU), and Radware Ltd. (NASDAQ:RDWR). This group of stocks are the members of the information technology services industry and their market caps are closest to SYKE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Unisys Corporation (NYSE:UIS) | 16 | 0 | 0 |
| EPIQ Systems, Inc. (NASDAQ:EPIQ) | 8 | 0 | 0 |
| 21Vianet Group Inc (NASDAQ:VNET) | 9 | 0 | 0 |
| Virtusa Corporation (NASDAQ:VRTU) | 11 | 0 | 0 |
| Radware Ltd. (NASDAQ:RDWR) | 13 | 0 | 0 |
Using the returns explained by the previously mentioned studies, average investors must always keep one eye on hedge fund and insider trading sentiment, and Sykes Enterprises, Incorporated (NASDAQ:SYKE) is an important part of this process.
