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Hedge Funds Are Buying VASCO Data Security International, Inc. (VDSI)

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VASCO Data Security International, Inc. (NASDAQ:VDSI) has seen an increase in enthusiasm from smart money recently.

If you’d ask most investors, hedge funds are perceived as unimportant, old investment vehicles of the past. While there are over 8000 funds in operation at present, we look at the masters of this group, about 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by tracking their highest performing investments, we have identified a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 24 percentage points in 7 months (explore the details and some picks here).


Just as key, bullish insider trading activity is another way to break down the marketplace. Just as you’d expect, there are plenty of motivations for a corporate insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this method if piggybackers know what to do (learn more here).

Consequently, let’s take a glance at the recent action encompassing VASCO Data Security International, Inc. (NASDAQ:VDSI).

How have hedgies been trading VASCO Data Security International, Inc. (NASDAQ:VDSI)?

In preparation for this year, a total of 7 of the hedge funds we track were bullish in this stock, a change of 40% from the third quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly.

Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in VASCO Data Security International, Inc. (NASDAQ:VDSI), worth close to $12.4 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Gotham Asset Management, managed by Joel Greenblatt, which held a $1.5 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Neil Chriss’s Hutchin Hill Capital and Paul Tudor Jones’s Tudor Investment Corp.

As industrywide interest jumped, some big names were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, assembled the largest position in VASCO Data Security International, Inc. (NASDAQ:VDSI). Gotham Asset Management had 1.5 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new VDSI position is Mike Vranos’s Ellington.

Insider trading activity in VASCO Data Security International, Inc. (NASDAQ:VDSI)

Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time period, VASCO Data Security International, Inc. (NASDAQ:VDSI) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to VASCO Data Security International, Inc. (NASDAQ:VDSI). These stocks are Wave Systems Corp. (NASDAQ:WAVX), Mantech International Corp (NASDAQ:MANT), AsiaInfo-Linkage, Inc. (NASDAQ:ASIA), KEYW Holding Corp. (NASDAQ:KEYW), and Intralinks Holdings Inc (NYSE:IL). This group of stocks are the members of the security software & services industry and their market caps are closest to VDSI’s market cap.

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