Is The Advisory Board Company (ABCO) Going to Burn These Hedge Funds?
What's a smart The Advisory Board Company (NASDAQ:ABCO) investor to do?
In the financial world, there are many methods market participants can use to watch the equity markets. A duo of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outpace their index-focused peers by a superb margin (see just how much).
Equally as crucial, positive insider trading sentiment is another way to analyze the financial markets. As the old adage goes: there are lots of stimuli for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if "monkeys" understand where to look (learn more here).
Keeping this in mind, it's important to analyze the recent info about The Advisory Board Company (NASDAQ:ABCO).
Hedge fund activity in The Advisory Board Company (NASDAQ:ABCO)
Heading into Q3, a total of 8 of the hedge funds we track were bullish in this stock, a change of -11% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes significantly.
According to our 13F database, Chuck Royce's Royce & Associates had the biggest position in The Advisory Board Company (NASDAQ:ABCO), worth close to $60.8 million, accounting for 0.2% of its total 13F portfolio. Coming in second is Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, which held a $10.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Jim Simons's Renaissance Technologies, and D. E. Shaw's D E Shaw.
Since The Advisory Board Company (NASDAQ:ABCO) has witnessed bearish sentiment from the smart money's best and brightest, it's easy to see that there exists a select few fund managers that decided to sell off their entire stakes heading into Q2. Interestingly, Ken Griffin's Citadel Investment Group cut the largest stake of all the hedgies we monitor, worth about $9.1 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund dumped about $6.3 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q2.
How are insiders trading The Advisory Board Company (NASDAQ:ABCO)?
Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time period, The Advisory Board Company (NASDAQ:ABCO) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to The Advisory Board Company (NASDAQ:ABCO). These stocks are Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), Deluxe Corporation (NYSE:DLX), Fair Isaac Corporation (NYSE:FICO), Healthcare Services Group, Inc. (NASDAQ:HCSG), and Zillow Inc (NASDAQ:Z). This group of stocks are in the business services industry and their market caps are similar to ABCO's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Portfolio Recovery Associates, Inc. (NASDAQ:PRAA)
Deluxe Corporation (NYSE:DLX)
Fair Isaac Corporation (NYSE:FICO)
Healthcare Services Group, Inc. (NASDAQ:HCSG)
Zillow Inc (NASDAQ:Z)
Using the results explained by Insider Monkey's studies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and The Advisory Board Company (NASDAQ:ABCO) applies perfectly to this mantra.