Oracle Corporation (NASDAQ:ORCL) is down a little over 2% in 2013, and this has been a disappointment, no doubt. There is an indicator, however, that’s suggesting now may be the time to buy. What is it?
To many investors, hedge funds are viewed as delayed, old financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds in operation currently, this site aim at the upper echelon of this club, about 525 funds. Analysts calculate that this group oversees most of the smart money’s total capital, and by tracking their best equity investments, we’ve found a few investment strategies that have historically outpaced 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 beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as key, positive insider trading activity is another way to look at the investments you’re interested in. Just as you’d expect, there are a variety of incentives for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).
Keeping this in mind, we’re going to analyze the latest info for Oracle Corporation (NASDAQ:ORCL).
How have hedgies been trading Oracle Corporation (NASDAQ:ORCL)?
Heading into Q3, a total of 72 of the hedge funds we track held long positions in this stock, a change of 4% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.
Consequently, certain bigger names were leading the bulls’ herd. Eagle Capital Management, managed by Boykin Curry, established the biggest position in Oracle Corporation (NASDAQ:ORCL). Eagle Capital Management had 1.1579 billion invested in the company at the end of the quarter. Matt McLennan’s First Eagle Investment Management also initiated a $719.3 million position during the quarter. The following funds were also among the new ORCL investors: Donald Yacktman’s Yacktman Asset Management, Ken Fisher’s Fisher Asset Management, and Richard S. Pzena’s Pzena Investment Management.
Insider trading activity in Oracle Corporation (NASDAQ:ORCL)
Insider buying is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, Oracle Corporation (NASDAQ:ORCL) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Oracle Corporation (NASDAQ:ORCL). These stocks are Intuit Inc. (NASDAQ:INTU), Adobe Systems Incorporated (NASDAQ:ADBE), salesforce.com, inc. (NYSE:CRM), Microsoft Corporation (NASDAQ:MSFT), and SAP AG (ADR) (NYSE:SAP). This group of stocks are the members of the application software industry and their market caps are similar to ORCL’s market cap.
