DTS Inc. (DTSI): Hedge Funds and Insiders Are Bearish, What Should You Do?

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DTS Inc. (NASDAQ:DTSI) was in 5 hedge funds’ portfolio at the end of March. DTSI investors should pay attention to a decrease in hedge fund sentiment recently. There were 8 hedge funds in our database with DTSI positions at the end of the previous quarter.

In today’s marketplace, there are tons of indicators market participants can use to monitor stocks. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outpace the market by a significant amount (see just how much).

Chuck RoyceEqually as integral, positive insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are a variety of stimuli for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this method if you understand where to look (learn more here).

Now, it’s important to take a look at the key action encompassing DTS Inc. (NASDAQ:DTSI).

How are hedge funds trading DTS Inc. (NASDAQ:DTSI)?

At Q1′s end, a total of 5 of the hedge funds we track held long positions in this stock, a change of -38% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the most valuable position in DTS Inc. (NASDAQ:DTSI), worth close to $27.7 million, comprising 0.1% of its total 13F portfolio. Coming in second is Trigran Investments, managed by Douglas T. Granat, which held a $13.1 million position; 6.7% of its 13F portfolio is allocated to the company. Other peers that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Judging by the fact that DTS Inc. (NASDAQ:DTSI) has faced falling interest from hedge fund managers, logic holds that there is a sect of funds that decided to sell off their positions entirely in Q1. Interestingly, Joel Greenblatt’s Gotham Asset Management dumped the largest investment of the 450+ funds we key on, comprising about $1 million in stock.. Charles Davidson’s fund, Wexford Capital, also cut its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 3 funds in Q1.

What have insiders been doing with DTS Inc. (NASDAQ:DTSI)?

Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, DTS Inc. (NASDAQ:DTSI) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to DTS Inc. (NASDAQ:DTSI). These stocks are Active Network Inc (NYSE:ACTV), Vringo, Inc. (NYSEAMEX:VRNG), RealNetworks Inc (NASDAQ:RNWK), Guidance Software, Inc. (NASDAQ:GUID), and Actuate Corporation (NASDAQ:BIRT). This group of stocks belong to the application software industry and their market caps match DTSI’s market cap.

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