8×8, Inc. (EGHT): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

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8×8, Inc. (NASDAQ:EGHT) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. EGHT shareholders have witnessed an increase in support from the world’s most elite money managers in recent months. There were 10 hedge funds in our database with EGHT positions at the end of the previous quarter.

8x8, Inc. (NASDAQ:EGHT)

To most traders, hedge funds are viewed as worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey hone in on the crème de la crème of this group, about 450 funds. It is estimated that this group controls most of the smart money’s total asset base, and by watching their top equity investments, we have discovered 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 a year 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 23.3 percentage points in 8 months (check out a sample of our picks).

Just as integral, bullish insider trading activity is another way to break down the stock market universe. Obviously, there are a variety of stimuli for a corporate insider to cut shares of his or her company, but just one, very simple 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 take a glance at the latest action encompassing 8×8, Inc. (NASDAQ:EGHT).

How are hedge funds trading 8×8, Inc. (NASDAQ:EGHT)?

In preparation for this quarter, a total of 11 of the hedge funds we track were long in this stock, a change of 10% from the first quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies we track, Archon Capital Management, managed by Constantinos J. Christofilis, holds the biggest position in 8×8, Inc. (NASDAQ:EGHT). Archon Capital Management has a $25.9 million position in the stock, comprising 13.4% of its 13F portfolio. The second largest stake is held by Driehaus Capital, managed by Richard Driehaus, which held a $7.7 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Robert B. Gillam’s McKinley Capital Management, Jim Simons’s Renaissance Technologies and Matthew Hulsizer’s PEAK6 Capital Management.

As aggregate interest increased, some big names have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, established the most outsized position in 8×8, Inc. (NASDAQ:EGHT). Tudor Investment Corp had 0.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.3 million position during the quarter. The only other fund with a new position in the stock is Steven Cohen’s SAC Capital Advisors.

What have insiders been doing with 8×8, Inc. (NASDAQ:EGHT)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time period, 8×8, Inc. (NASDAQ:EGHT) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to 8×8, Inc. (NASDAQ:EGHT). These stocks are CalAmp Corp. (NASDAQ:CAMP), Allot Communications Ltd. (NASDAQ:ALLT), Calix Inc (NYSE:CALX), Comtech Telecomm. Corp. (NASDAQ:CMTL), and Vocera Communications Inc (NYSE:VCRA). All of these stocks are in the communication equipment industry and their market caps are closest to EGHT’s market cap.

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