Do Hedge Funds and Insiders Love Deluxe Corporation (DLX)?
Should Deluxe Corporation (NYSE:DLX) investors track the following data?
In the eyes of many of your peers, hedge funds are assumed to be useless, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds in operation in present day, this site aim at the upper echelon of this club, around 525 funds. Analysts calculate that this group controls the lion's share of the hedge fund industry's total capital, and by keeping an eye on their best picks, we've found a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as useful, positive insider trading sentiment is another way to analyze the investments you're interested in. There are a variety of incentives for an insider to cut shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).
Now that that's out of the way, let's analyze the latest info about Deluxe Corporation (NYSE:DLX).
How are hedge funds trading Deluxe Corporation (NYSE:DLX)?
At the end of the second quarter, a total of 16 of the hedge funds we track were long in this stock, a change of 33% from one quarter earlier. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably.
When using filings from the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Deluxe Corporation (NYSE:DLX). Renaissance Technologies has a $34 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is McKinley Capital Management, managed by Robert B. Gillam, which held a $24.9 million position; 1.3% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Joel Greenblatt's Gotham Asset Management, Israel Englander's Millennium Management and Andy Redleaf's Whitebox Advisors.
Now, particular hedge funds have jumped into Deluxe Corporation (NYSE:DLX) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the largest position in Deluxe Corporation (NYSE:DLX). Renaissance Technologies had 34 million invested in the company at the end of the quarter. Robert B. Gillam's McKinley Capital Management also initiated a $24.9 million position during the quarter. The following funds were also among the new DLX investors: Joel Greenblatt's Gotham Asset Management, Israel Englander's Millennium Management, and Andy Redleaf's Whitebox Advisors.
What have insiders been doing with Deluxe Corporation (NYSE:DLX)?
Legal insider trading, particularly when it's bullish, is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time period, Deluxe Corporation (NYSE:DLX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to Deluxe Corporation (NYSE:DLX). These stocks are HMS Holdings Corp. (NASDAQ:HMSY), Ritchie Bros. Auctioneers (USA) (NYSE:RBA), RR Donnelley & Sons Co (NASDAQ:RRD), Lender Processing Services, Inc. (NYSE:LPS), and Portfolio Recovery Associates, Inc. (NASDAQ:PRAA). This group of stocks are in the business services industry and their market caps are closest to DLX's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
HMS Holdings Corp. (NASDAQ:HMSY)
Ritchie Bros. Auctioneers (USA) (NYSE:RBA)
RR Donnelley & Sons Co (NASDAQ:RRD)
Lender Processing Services, Inc. (NYSE:LPS)
Portfolio Recovery Associates, Inc. (NASDAQ:PRAA)
Using the returns explained by the previously mentioned analyses, average investors must always track hedge fund and insider trading sentiment, and Deluxe Corporation (NYSE:DLX) is no exception.