Is Responsys Inc (NASDAQ:MKTG) an excellent investment right now? Money managers are in an optimistic mood. The number of bullish hedge fund positions moved up by 1 recently.
To most shareholders, hedge funds are seen as worthless, outdated financial tools of years past. While there are greater than 8000 funds in operation today, we at Insider Monkey choose to focus on the moguls of this group, about 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their highest performing equity investments, we have identified a number of investment strategies that have historically outperformed the 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as beneficial, optimistic insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are plenty of stimuli for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this strategy if piggybackers know where to look (learn more here).
With all of this in mind, it’s important to take a look at the key action surrounding Responsys Inc (NASDAQ:MKTG).
How have hedgies been trading Responsys Inc (NASDAQ:MKTG)?
In preparation for this quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 7% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes considerably.
Of the funds we track, Mark N. Diker’s Diker Management had the largest position in Responsys Inc (NASDAQ:MKTG), worth close to $16.9 million, accounting for 4.6% of its total 13F portfolio. The second largest stake is held by Nokota Management, managed by Matthew Knauer and Mina Faltas, which held a $13.2 million position; 0.7% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Seymour Sy Kaufman and Michael Stark’s Crosslink Capital, Richard S. Meisenberg’s ACK Asset Management and Eric Semler’s TCS Capital Management.
As aggregate interest increased, specific money managers were breaking ground themselves. ACK Asset Management, managed by Richard S. Meisenberg, initiated the most outsized position in Responsys Inc (NASDAQ:MKTG). ACK Asset Management had 2.2 million invested in the company at the end of the quarter. Eric Semler’s TCS Capital Management also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Richard Driehaus’s Driehaus Capital, Mike Vranos’s Ellington, and Philip Hempleman’s Ardsley Partners.
What do corporate executives and insiders think about Responsys Inc (NASDAQ:MKTG)?
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time period, Responsys Inc (NASDAQ:MKTG) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Responsys Inc (NASDAQ:MKTG). These stocks are SeaChange International (NASDAQ:SEAC), Qualys Inc (NASDAQ:QLYS), LogMeIn Inc (NASDAQ:LOGM), NQ Mobile Inc (ADR) (NYSE:NQ), and Incontact Inc (NASDAQ:SAAS). All of these stocks are in the application software industry and their market caps are similar to MKTG’s market cap.