Is Blucora Inc (NASDAQ:BCOR) undervalued? Investors who are in the know are getting more bullish. The number of long hedge fund bets inched up by 1 in recent months.
If you’d ask most investors, hedge funds are perceived as worthless, outdated investment tools of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey hone in on the leaders of this group, about 450 funds. It is estimated that this group controls most of the smart money’s total asset base, and by paying attention to their top picks, we have unsheathed a few investment strategies that have historically outperformed the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as beneficial, bullish insider trading sentiment is another way to break down the marketplace. Just as you’d expect, there are a variety of stimuli for an insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know what to do (learn more here).
Consequently, we’re going to take a glance at the key action surrounding Blucora Inc (NASDAQ:BCOR).
What does the smart money think about Blucora Inc (NASDAQ:BCOR)?
Heading into 2013, a total of 18 of the hedge funds we track held long positions in this stock, a change of 6% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
Of the funds we track, Jim Simons’s Renaissance Technologies had the most valuable position in Blucora Inc (NASDAQ:BCOR), worth close to $26 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Steven Cohen of SAC Capital Advisors, with a $18 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Richard Rubin’s Hawkeye Capital, Chuck Royce’s Royce & Associates and Cliff Asness’s AQR Capital Management.
Now, some big names have been driving this bullishness. SAC Capital Advisors, managed by Steven Cohen, established the most valuable position in Blucora Inc (NASDAQ:BCOR). SAC Capital Advisors had 18 million invested in the company at the end of the quarter. Zeke Ashton’s Centaur Capital Partners also initiated a $2 million position during the quarter. The other funds with brand new BCOR positions are Whitney Tilson’s T2 Partners and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
How are insiders trading Blucora Inc (NASDAQ:BCOR)?
Insider buying is most useful when the company in question has seen transactions within the past 180 days. Over the last 180-day time frame, Blucora Inc (NASDAQ:BCOR) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s studies, retail investors should always pay attention to hedge fund and insider trading activity, and Blucora Inc (NASDAQ:BCOR) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.