Total System Services, Inc. (NYSE:TSS): Are Hedge Funds Right About This Stock?

Total System Services, Inc. (NYSE:TSS) shareholders have witnessed a decrease in hedge fund interest recently.

According to most shareholders, hedge funds are assumed to be unimportant, outdated financial tools of yesteryear. While there are over 8000 funds in operation at present, we choose to focus on the leaders of this club, about 450 funds. It is estimated that this group controls most of the smart money’s total capital, and by watching their highest performing picks, we have uncovered a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (see all of our picks from August).

Just as important, positive insider trading sentiment is another way to break down the financial markets. There are a number of reasons for an insider to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).

With all of this in mind, we’re going to take a glance at the latest action regarding Total System Services, Inc. (NYSE:TSS).

What have hedge funds been doing with Total System Services, Inc. (NYSE:TSS)?

At the end of the fourth quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of -6% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Total System Services, Inc. (NYSE:TSS). Renaissance Technologies has a $88 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $35 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Israel Englander’s Millennium Management, David Harding’s Winton Capital Management and D. E. Shaw’s D E Shaw.

Judging by the fact that Total System Services, Inc. (NYSE:TSS) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that decided to sell off their full holdings heading into 2013. Interestingly, Noam Gottesman’s GLG Partners dropped the largest investment of the “upper crust” of funds we key on, worth about $2 million in stock., and Ben Levine, Andrew Manuel and Stefan Renold of LMR Partners was right behind this move, as the fund dumped about $1 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds heading into 2013.

Insider trading activity in Total System Services, Inc. (NYSE:TSS)

Insider buying is at its handiest when the company in question has seen transactions within the past 180 days. Over the last 180-day time period, Total System Services, Inc. (NYSE:TSS) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

With the returns demonstrated by Insider Monkey’s tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Total System Services, Inc. (NYSE:TSS) is an important part of this process.

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