Vonage Holdings Corp. (NYSE:VG) has experienced a decrease in enthusiasm from smart money lately.
To most investors, hedge funds are viewed as unimportant, old investment tools of years past. While there are over 8000 funds in operation today, we at Insider Monkey choose to focus on the upper echelon of this club, about 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total capital, and by tracking their best equity investments, we have identified a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 24 percentage points in 7 months (see all of our picks from August).
Just as integral, bullish insider trading activity is a second way to parse down the stock market universe. There are a number of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this tactic if piggybackers know what to do (learn more here).
With all of this in mind, let’s take a peek at the key action surrounding Vonage Holdings Corp. (NYSE:VG).
How are hedge funds trading Vonage Holdings Corp. (NYSE:VG)?
Heading into 2013, a total of 14 of the hedge funds we track were long in this stock, a change of -7% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Edward A. Mule’s Silver Point Capital had the most valuable position in Vonage Holdings Corp. (NYSE:VG), worth close to $17 million, comprising 1.5% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $14 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Eric Semler’s TCS Capital Management, D. E. Shaw’s D E Shaw and Joel Greenblatt’s Gotham Asset Management.
Seeing as Vonage Holdings Corp. (NYSE:VG) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedge funds that slashed their entire stakes heading into 2013. Intriguingly, Michael Johnston’s Steelhead Partners said goodbye to the biggest stake of all the hedgies we key on, valued at about $4 million in stock.. Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s fund, GRT Capital Partners, also dropped its stock, about $0 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds heading into 2013.
How are insiders trading Vonage Holdings Corp. (NYSE:VG)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Vonage Holdings Corp. (NYSE:VG) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Vonage Holdings Corp. (NYSE:VG). These stocks are Lumos Networks Corp (NASDAQ:LMOS), Cogent Communications Group, Inc. (NASDAQ:CCOI), RigNet Inc (NASDAQ:RNET), Iridium Communications Inc. (NASDAQ:IRDM), and Premiere Global Services, Inc. (NYSE:PGI). This group of stocks are the members of the diversified communication services industry and their market caps are similar to VG’s market cap.