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Do Hedge Funds and Insiders Love InterNAP Network Services (INAP)?

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InterNAP Network Services (NASDAQ:INAP) was in 6 hedge funds’ portfolio at the end of December. INAP has seen a decrease in hedge fund sentiment of late. There were 8 hedge funds in our database with INAP holdings at the end of the previous quarter.

In the eyes of most investors, hedge funds are assumed to be worthless, outdated investment vehicles of yesteryear. While there are more than 8000 funds trading today, we look at the upper echelon of this club, around 450 funds. It is widely believed that this group controls most of the smart money’s total asset base, and by keeping an eye on their top investments, we have unearthed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as key, bullish insider trading activity is a second way to break down the stock market universe. As the old adage goes: there are a variety of stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).

With all of this in mind, we’re going to take a look at the recent action regarding InterNAP Network Services (NASDAQ:INAP).

What have hedge funds been doing with InterNAP Network Services (NASDAQ:INAP)?

At the end of the fourth quarter, a total of 6 of the hedge funds we track were long in this stock, a change of -25% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

InterNAP Network Services (NASDAQ:INAP)According to our comprehensive database, GAMCO Investors, managed by Mario Gabelli, holds the biggest position in InterNAP Network Services (NASDAQ:INAP). GAMCO Investors has a $42 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $2.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Bruce Silver’s Silver Capital Management LLC, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.

Due to the fact that InterNAP Network Services (NASDAQ:INAP) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers that decided to sell off their entire stakes in Q4. Interestingly, Joseph A. Jolson’s Harvest Capital Strategies sold off the biggest stake of all the hedgies we watch, comprising about $3.6 million in stock.. Israel Englander’s fund, Millennium Management, also dumped its stock, about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds in Q4.

How are insiders trading InterNAP Network Services (NASDAQ:INAP)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, InterNAP Network Services (NASDAQ:INAP) has seen 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to InterNAP Network Services (NASDAQ:INAP). These stocks are ClickSoftware Technologies Ltd. (NASDAQ:CKSW), QuinStreet Inc (NASDAQ:QNST), Vocus, Inc. (NASDAQ:VOCS), Demand Media Inc (NYSE:DMD), and Digital River, Inc. (NASDAQ:DRIV). This group of stocks are in the internet software & services industry and their market caps match INAP’s market cap.

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