Is The Corporate Executive Board Company (NYSE:CEB) a bargain? Investors who are in the know are getting less optimistic. The number of bullish hedge fund bets went down by 5 lately.
If you’d ask most market participants, hedge funds are viewed as worthless, outdated financial vehicles of the past. While there are greater than 8000 funds in operation today, we choose to focus on the crème de la crème of this group, close to 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by monitoring their top picks, we have uncovered a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as integral, positive insider trading activity is another way to break down the marketplace. Just as you’d expect, there are a variety of incentives for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the recent action regarding The Corporate Executive Board Company (NYSE:CEB).
What does the smart money think about The Corporate Executive Board Company (NYSE:CEB)?
At year’s end, a total of 6 of the hedge funds we track held long positions in this stock, a change of -45% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in The Corporate Executive Board Company (NYSE:CEB). Royce & Associates has a $40.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Bares Capital Management, managed by Brian Bares, which held a $23.9 million position; the fund has 4.2% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Steven Cohen’s SAC Capital Advisors.
Because The Corporate Executive Board Company (NYSE:CEB) has witnessed falling interest from the aggregate hedge fund industry, we can see that there was a specific group of hedgies that elected to cut their entire stakes in Q4. Intriguingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest stake of all the hedgies we track, worth close to $7 million in stock., and Richard Driehaus of Driehaus Capital was right behind this move, as the fund said goodbye to about $5 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 5 funds in Q4.
What do corporate executives and insiders think about The Corporate Executive Board Company (NYSE:CEB)?
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time period, The Corporate Executive Board Company (NYSE:CEB) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to The Corporate Executive Board Company (NYSE:CEB). These stocks are Huron Consulting Group (NASDAQ:HURN), Corrections Corp Of America (NYSE:CXW), Accretive Health, Inc. (NYSE:AH), FTI Consulting, Inc. (NYSE:FCN), and Booz Allen Hamilton Holding Corporation (NYSE:BAH). This group of stocks belong to the management services industry and their market caps match CEB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Huron Consulting Group (NASDAQ:HURN) | 7 | 1 | 5 |
| Corrections Corp Of America (NYSE:CXW) | 23 | 0 | 11 |
| Accretive Health, Inc. (NYSE:AH) | 16 | 0 | 1 |
| FTI Consulting, Inc. (NYSE:FCN) | 8 | 0 | 1 |
| Booz Allen Hamilton Holding Corporation (NYSE:BAH) | 6 | 0 | 8 |
With the results shown by the aforementioned studies, retail investors must always monitor hedge fund and insider trading sentiment, and The Corporate Executive Board Company (NYSE:CEB) shareholders fit into this picture quite nicely.
