Is TeleCommunication Systems, Inc. (NASDAQ:TSYS) worth your attention right now? Prominent investors are taking a bullish view. The number of long hedge fund positions inched up by 3 lately.
In the eyes of most market participants, hedge funds are viewed as worthless, outdated investment tools of the past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey hone in on the top tier of this group, close to 450 funds. It is widely believed that this group has its hands on most of all hedge funds' total asset base, and by tracking their highest performing equity investments, we have come up with a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as key, optimistic insider trading activity is a second way to parse down the world of equities. There are many reasons for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).
With all of this in mind, it's important to take a look at the recent action regarding TeleCommunication Systems, Inc. (NASDAQ:TSYS).
In preparation for this quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of 43% from the previous quarter. With hedgies' 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, J. Carlo Cannell's Cannell Capital had the largest position in TeleCommunication Systems, Inc. (NASDAQ:TSYS), worth close to $6.8 million, comprising 4.4% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $2.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include D. E. Shaw's D E Shaw, Peter Algert and Kevin Coldiron's Algert Coldiron Investors and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk's GRT Capital Partners.
As aggregate interest increased, some big names were leading the bulls' herd. PEAK6 Capital Management, managed by Matthew Hulsizer, initiated the most valuable call position in TeleCommunication Systems, Inc. (NASDAQ:TSYS). PEAK6 Capital Management had 0.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners.
Insider buying is best served when the company in focus has seen transactions within the past 180 days. Over the latest six-month time frame, TeleCommunication Systems, Inc. (NASDAQ:TSYS) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by our research, everyday investors must always monitor hedge fund and insider trading sentiment, and TeleCommunication Systems, Inc. (NASDAQ:TSYS) shareholders fit into this picture quite nicely.