Global Cash Access Holdings, Inc. (GCA): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged
Is Global Cash Access Holdings, Inc. (NYSE:GCA) a good investment?
In the eyes of many traders, hedge funds are seen as useless, outdated investment vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open today, this site looks at the top tier of this club, about 525 funds. It is assumed that this group has its hands on the majority of the smart money's total assets, and by paying attention to their highest quality investments, we've determined a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as useful, bullish insider trading activity is a second way to look at the world of equities. Just as you'd expect, there are many motivations for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if piggybackers understand where to look (learn more here).
Now that that's out of the way, we're going to analyze the newest info surrounding Global Cash Access Holdings, Inc. (NYSE:GCA).
How have hedgies been trading Global Cash Access Holdings, Inc. (NYSE:GCA)?
Heading into Q3, a total of 14 of the hedge funds we track held long positions in this stock, a change of -26% from one quarter earlier. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably.
When using filings from the hedgies we track, Private Capital Management, managed by Gregg J. Powers, holds the most valuable position in Global Cash Access Holdings, Inc. (NYSE:GCA). Private Capital Management has a $15.8 million position in the stock, comprising 1.5% of its 13F portfolio. Sitting at the No. 2 spot is D E Shaw, managed by D. E. Shaw, which held a $10.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jim Simons's Renaissance Technologies, Amy Minella's Cardinal Capital and Israel Englander's Millennium Management.
Since Global Cash Access Holdings, Inc. (NYSE:GCA) has witnessed dropping sentiment from the top-tier hedge fund industry, it's easy to see that there was a specific group of hedge funds that decided to sell off their positions entirely heading into Q2. It's worth mentioning that Gregory A. Weaver's Invicta Capital Management dumped the biggest stake of all the hedgies we watch, totaling about $9.9 million in stock. David Dreman's fund, Dreman Value Management, also dropped its stock, about $5.9 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 5 funds heading into Q2.
What do corporate executives and insiders think about Global Cash Access Holdings, Inc. (NYSE:GCA)?
Legal insider trading, particularly when it's bullish, is best served when the company in question has seen transactions within the past six months. Over the last 180-day time frame, Global Cash Access Holdings, Inc. (NYSE:GCA) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Global Cash Access Holdings, Inc. (NYSE:GCA). These stocks are Medallion Financial Corp (NASDAQ:TAXI), DFC Global Corp (NASDAQ:DLLR), Federal Agricultural Mortgage Corp. (NYSE:AGM), NewStar Financial Inc (NASDAQ:NEWS), and Fifth Street Finance Corp. (NASDAQ:FSC). This group of stocks are in the credit services industry and their market caps are similar to GCA's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Medallion Financial Corp (NASDAQ:TAXI)
DFC Global Corp (NASDAQ:DLLR)
Federal Agricultural Mortgage Corp. (NYSE:AGM)
NewStar Financial Inc (NASDAQ:NEWS)
Fifth Street Finance Corp. (NASDAQ:FSC)
Using the results shown by our analyses, regular investors must always keep one eye on hedge fund and insider trading activity, and Global Cash Access Holdings, Inc. (NYSE:GCA) is an important part of this process.