Is Blackbaud, Inc. (NASDAQ:BLKB) an excellent investment right now? The best stock pickers are in a bearish mood. The number of long hedge fund bets were trimmed by 1 lately.
In the eyes of most shareholders, hedge funds are perceived as unimportant, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the top tier of this club, close to 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their top stock picks, we have spotted a few investment strategies that have historically outpaced the market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as integral, positive insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are many motivations for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this tactic if shareholders know what to do (learn more here).
Keeping this in mind, let’s take a look at the recent action encompassing Blackbaud, Inc. (NASDAQ:BLKB).
Hedge fund activity in Blackbaud, Inc. (NASDAQ:BLKB)
Heading into 2013, a total of 6 of the hedge funds we track were long in this stock, a change of -14% from the third 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 increasing their holdings considerably.
According to our comprehensive database, Generation Investment Management, managed by David Blood and Al Gore, holds the most valuable position in Blackbaud, Inc. (NASDAQ:BLKB). Generation Investment Management has a $85.8 million position in the stock, comprising 2% of its 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $18.3 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
Due to the fact that Blackbaud, Inc. (NASDAQ:BLKB) has faced declining sentiment from the smart money, logic holds that there were a few money managers that slashed their full holdings at the end of the year. At the top of the heap, Paul Tudor Jones’s Tudor Investment Corp sold off the largest investment of all the hedgies we key on, comprising about $0.4 million in stock. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds at the end of the year.
How have insiders been trading Blackbaud, Inc. (NASDAQ:BLKB)?
Insider purchases made by high-level executives is at its handiest when the company in question has experienced transactions within the past half-year. Over the latest six-month time period, Blackbaud, Inc. (NASDAQ:BLKB) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Blackbaud, Inc. (NASDAQ:BLKB). These stocks are NetScout Systems, Inc. (NASDAQ:NTCT), Pegasystems Inc. (NASDAQ:PEGA), Bottomline Technologies (NASDAQ:EPAY), Sapient Corporation (NASDAQ:SAPE), and MicroStrategy Incorporated (NASDAQ:MSTR). This group of stocks belong to the business software & services industry and their market caps are closest to BLKB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| NetScout Systems, Inc. (NASDAQ:NTCT) | 15 | 0 | 2 |
| Pegasystems Inc. (NASDAQ:PEGA) | 6 | 0 | 5 |
| Bottomline Technologies (NASDAQ:EPAY) | 8 | 0 | 7 |
| Sapient Corporation (NASDAQ:SAPE) | 16 | 0 | 6 |
| MicroStrategy Incorporated (NASDAQ:MSTR) | 13 | 1 | 0 |
With the returns exhibited by our tactics, retail investors must always monitor hedge fund and insider trading sentiment, and Blackbaud, Inc. (NASDAQ:BLKB) applies perfectly to this mantra.
