DTS Inc. (NASDAQ:DTSI) was in 7 hedge funds’ portfolio at the end of December. DTSI has seen an increase in support from the world’s most elite money managers recently. There were 5 hedge funds in our database with DTSI positions at the end of the previous quarter.
To most shareholders, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the moguls of this club, around 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total capital, and by monitoring their best investments, we have revealed a number of investment strategies that have historically outpaced the market. 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 outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as beneficial, positive insider trading activity is a second way to break down the financial markets. Obviously, there are lots of incentives for an insider to drop shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if piggybackers know where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the recent action encompassing DTS Inc. (NASDAQ:DTSI).
Hedge fund activity in DTS Inc. (NASDAQ:DTSI)
In preparation for this year, a total of 7 of the hedge funds we track held long positions in this stock, a change of 40% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in DTS Inc. (NASDAQ:DTSI). Royce & Associates has a $28.6 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $4.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Charles Davidson’s Wexford Capital.
Consequently, key money managers have jumped into DTS Inc. (NASDAQ:DTSI) headfirst. Wexford Capital, managed by Charles Davidson, initiated the most outsized position in DTS Inc. (NASDAQ:DTSI). Wexford Capital had 0.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. The only other fund with a brand new DTSI position is Paul Tudor Jones’s Tudor Investment Corp.
What have insiders been doing with DTS Inc. (NASDAQ:DTSI)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last half-year time frame, DTS Inc. (NASDAQ:DTSI) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out 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). All of these stocks are in the application software industry and their market caps are similar to DTSI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Active Network Inc (NYSE:ACTV) | 11 | 3 | 6 |
| Vringo, Inc. (NYSEAMEX:VRNG) | 6 | 0 | 8 |
| RealNetworks Inc (NASDAQ:RNWK) | 7 | 0 | 1 |
| Guidance Software, Inc. (NASDAQ:GUID) | 8 | 2 | 4 |
| Actuate Corporation (NASDAQ:BIRT) | 14 | 0 | 0 |
With the returns exhibited by the aforementioned strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and DTS Inc. (NASDAQ:DTSI) applies perfectly to this mantra.
