Is Aspen Technology, Inc. (NASDAQ:AZPN) a marvelous investment now? Hedge funds are getting more bullish. The number of bullish hedge fund positions increased by 3 in recent months.
To most investors, hedge funds are assumed to be unimportant, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, we at Insider Monkey look at the moguls of this club, about 450 funds. Most estimates calculate that this group oversees the lion's share of the smart money's total capital, and by tracking their best stock picks, we have discovered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as integral, positive insider trading activity is another way to parse down the financial markets. Just as you'd expect, there are lots of reasons for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if "monkeys" know what to do (learn more here).
With these "truths" under our belt, we're going to take a gander at the recent action surrounding Aspen Technology, Inc. (NASDAQ:AZPN).
At Q1's end, a total of 19 of the hedge funds we track held long positions in this stock, a change of 19% from one quarter earlier. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Panayotis Takis Sparaggis's Alkeon Capital Management had the most valuable position in Aspen Technology, Inc. (NASDAQ:AZPN), worth close to $118.2 million, comprising 2.6% of its total 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which held a $36.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Andrew Sandler's Sandler Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Jim Simons's Renaissance Technologies.
Consequently, some big names were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, assembled the most valuable position in Aspen Technology, Inc. (NASDAQ:AZPN). Driehaus Capital had 1.4 million invested in the company at the end of the quarter. Van Schreiber's Bennett Lawrence Management also initiated a $1.2 million position during the quarter. The other funds with brand new AZPN positions are Alec Litowitz and Ross Laser's Magnetar Capital and Mike Vranos's Ellington.
Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, Aspen Technology, Inc. (NASDAQ:AZPN) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to Aspen Technology, Inc. (NASDAQ:AZPN). These stocks are Solera Holdings Inc (NYSE:SLH), Jack Henry & Associates, Inc. (NASDAQ:JKHY), SS and C Technologies Holdings Inc (NASDAQ:SSNC), Informatica Corporation (NASDAQ:INFA), and Tibco Software Inc. (NASDAQ:TIBX). All of these stocks are in the business software & services industry and their market caps match AZPN's market cap.