Fusion-IO, Inc. (NYSE:FIO) was in 20 hedge funds’ portfolio at the end of the fourth quarter of 2012. FIO shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. There were 20 hedge funds in our database with FIO positions at the end of the previous quarter.
Just as important, positive insider trading sentiment is a second way to break down the marketplace. There are a variety of motivations for an executive to drop shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
With all of this in mind, it’s important to take a glance at the recent action regarding Fusion-IO, Inc. (NYSE:FIO).
What have hedge funds been doing with Fusion-IO, Inc. (NYSE:FIO)?
Heading into 2013, a total of 20 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Donald Chiboucis’s Columbus Circle Investors had the biggest position in Fusion-IO, Inc. (NYSE:FIO), worth close to $66.4 million, comprising 0.5% of its total 13F portfolio. The second largest stake is held by Appaloosa Management LP, managed by David Tepper, which held a $32.2 million position; 0.7% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Stuart Peterson’s Artis Capital Management, Drew Cupps’s Cupps Capital Management and Steven Cohen’s SAC Capital Advisors.
Judging by the fact that Fusion-IO, Inc. (NYSE:FIO) has faced bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of fund managers that decided to sell off their full holdings in Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management cut the largest position of the “upper crust” of funds we track, worth an estimated $11.2 million in stock., and Eric Bannasch of Cadian Capital was right behind this move, as the fund dropped about $10.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Fusion-IO, Inc. (NYSE:FIO)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past six months. Over the last half-year time frame, Fusion-IO, Inc. (NYSE:FIO) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Fusion-IO, Inc. (NYSE:FIO). These stocks are Datalink Corporation (NASDAQ:DTLK), Xyratex Ltd. (NASDAQ:XRTX), Quantum Corp (NYSE:QTM), Emulex Corporation (NYSE:ELX), and Brocade Communications Systems, Inc. (NASDAQ:BRCD). This group of stocks are in the data storage devices industry and their market caps are similar to FIO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Datalink Corporation (NASDAQ:DTLK) | 5 | 0 | 4 |
| Xyratex Ltd. (NASDAQ:XRTX) | 7 | 0 | 0 |
| Quantum Corp (NYSE:QTM) | 11 | 1 | 0 |
| Emulex Corporation (NYSE:ELX) | 17 | 2 | 5 |
| Brocade Communications Systems, Inc. (NASDAQ:BRCD) | 21 | 0 | 3 |
With the returns exhibited by Insider Monkey’s research, everyday investors must always watch hedge fund and insider trading sentiment, and Fusion-IO, Inc. (NYSE:FIO) shareholders fit into this picture quite nicely.
