Is Infosys Ltd ADR (NYSE:INFY) a buy, sell, or hold? Money managers are taking a pessimistic view. The number of bullish hedge fund bets retreated by 2 in recent months.
At the moment, there are plenty of indicators market participants can use to track stocks. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can outperform the market by a healthy amount (see just how much).
Just as integral, bullish insider trading sentiment is another way to break down the investments you’re interested in. There are a variety of reasons for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if shareholders know what to do (learn more here).
Now, it’s important to take a peek at the recent action surrounding Infosys Ltd ADR (NYSE:INFY).
What does the smart money think about Infosys Ltd ADR (NYSE:INFY)?
In preparation for this year, a total of 9 of the hedge funds we track were bullish in this stock, a change of -18% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully.
Of the funds we track, Polaris Capital Management, managed by Bernard Horn, holds the biggest position in Infosys Ltd ADR (NYSE:INFY). Polaris Capital Management has a $68.6 million position in the stock, comprising 4.9% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $42.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Jane Mendillo’s Harvard Management Co.
Seeing as Infosys Ltd ADR (NYSE:INFY) has faced a declination in interest from hedge fund managers, it’s easy to see that there is a sect of hedgies who sold off their full holdings in Q4. Interestingly, John Murphy’s Alydar Capital cut the largest position of the 450+ funds we watch, comprising an estimated $7.3 million in call options. Peter J. Eichler Jr.’s fund, Aletheia Research and Management, also cut its stock, about $1.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in Q4.
What have insiders been doing with Infosys Ltd ADR (NYSE:INFY)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, Infosys Ltd ADR (NYSE:INFY) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Infosys Ltd ADR (NYSE:INFY). These stocks are Concur Technologies, Inc. (NASDAQ:CNQR), National Instruments Corp (NASDAQ:NATI), ANSYS, Inc. (NASDAQ:ANSS), Autodesk, Inc. (NASDAQ:ADSK), and VMware, Inc. (NYSE:VMW). All of these stocks are in the technical & system software industry and their market caps match INFY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Concur Technologies, Inc. (NASDAQ:CNQR) | 12 | 0 | 9 |
| National Instruments Corp (NASDAQ:NATI) | 8 | 1 | 4 |
| ANSYS, Inc. (NASDAQ:ANSS) | 13 | 0 | 9 |
| Autodesk, Inc. (NASDAQ:ADSK) | 29 | 0 | 8 |
| VMware, Inc. (NYSE:VMW) | 32 | 1 | 7 |
With the returns exhibited by the aforementioned tactics, retail investors must always watch hedge fund and insider trading sentiment, and Infosys Ltd ADR (NYSE:INFY) applies perfectly to this mantra.
