Have Hedge Funds Found A Hidden Gem in Guidewire Software Inc (GWRE)?

As aggregate interest increased, specific money managers were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the largest position in Guidewire Software Inc (NYSE:GWRE). Two Sigma Advisors had $4.2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $3.8 million investment in the stock during the quarter. The following funds were also among the new GWRE investors: George Hall’s Clinton Group, D E Shaw, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Guidewire Software Inc (NYSE:GWRE) but similarly valued. These stocks are Taubman Centers, Inc. (NYSE:TCO), Toll Brothers Inc (NYSE:TOL), Gentex Corporation (NASDAQ:GNTX), and IAC/InterActiveCorp (NASDAQ:IAC). This group of stocks’ market valuations match GWRE’s market valuation.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $571 million. That figure was $119 million in GWRE’s case. IAC/InterActiveCorp (NASDAQ:IAC) is the most popular stock in this table. On the other hand Taubman Centers, Inc. (NYSE:TCO) is the least popular one with only 19 bullish hedge fund positions. Guidewire Software Inc (NYSE:GWRE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds really love. In this regard IAC might be a better candidate to consider a long position in.

Disclosure: None