Ciena Corporation (NASDAQ:CIEN) investors should pay attention to an increase in hedge fund sentiment in recent months.
To the average investor, there are many metrics shareholders can use to analyze publicly traded companies. A couple of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outperform the broader indices by a healthy margin (see just how much).
Equally as integral, positive insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are many stimuli for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).
Consequently, let’s take a glance at the recent action regarding Ciena Corporation (NASDAQ:CIEN).
Hedge fund activity in Ciena Corporation (NASDAQ:CIEN)
At Q1’s end, a total of 27 of the hedge funds we track were bullish in this stock, a change of 50% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Kerr Neilson’s Platinum Asset Management had the most valuable position in Ciena Corporation (NASDAQ:CIEN), worth close to $107 million, accounting for 2.3% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $82.1 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Mariko Gordon’s Daruma Asset Management, Scott Fine and Peter Richards’s Empire Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Now, key money managers have jumped into Ciena Corporation (NASDAQ:CIEN) headfirst. Empire Capital Management, managed by Scott Fine and Peter Richards, initiated the largest position in Ciena Corporation (NASDAQ:CIEN). Empire Capital Management had 36.4 million invested in the company at the end of the quarter. Charles Clough’s Clough Capital Partners also made a $9.4 million investment in the stock during the quarter. The other funds with brand new CIEN positions are Eric Bannasch’s Cadian Capital, Israel Englander’s Millennium Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
How are insiders trading Ciena Corporation (NASDAQ:CIEN)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Ciena Corporation (NASDAQ:CIEN) has experienced zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Ciena Corporation (NASDAQ:CIEN). These stocks are NetGear, Inc. (NASDAQ:NTGR), Exelis Inc (NYSE:XLS), Acme Packet, Inc. (NASDAQ:APKT), Loral Space & Communications Ltd. (NASDAQ:LORL), and Arris Group, Inc. (NASDAQ:ARRS). This group of stocks are in the communication equipment industry and their market caps match CIEN’s market cap.