Is Verisign, Inc. (NASDAQ:VRSN) the right investment to pursue these days? The best stock pickers are getting more bullish. The number of long hedge fund bets rose by 19 lately.
According to most market participants, hedge funds are perceived as worthless, old financial tools of years past. While there are greater than 8000 funds trading today, we hone in on the bigwigs of this club, around 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total asset base, and by keeping an eye on their top equity investments, we have formulated a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as integral, optimistic insider trading activity is a second way to parse down the financial markets. There are lots of reasons for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this tactic if investors understand where to look (learn more here).
Keeping this in mind, let’s take a peek at the latest action surrounding Verisign, Inc. (NASDAQ:VRSN).
How are hedge funds trading Verisign, Inc. (NASDAQ:VRSN)?
Heading into 2013, a total of 49 of the hedge funds we track were bullish in this stock, a change of 63% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Stephen Mandel’s Lone Pine Capital had the largest position in Verisign, Inc. (NASDAQ:VRSN), worth close to $573 million billion, accounting for 3.6% of its total 13F portfolio. Sitting at the No. 2 spot is Hoplite Capital Management, managed by John Lykouretzos, which held a $175 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Warren Buffett’s Berkshire Hathaway, John Griffin’s Blue Ridge Capital and Philippe Laffont’s Coatue Management.
Now, key hedge funds have been driving this bullishness. Berkshire Hathaway, managed by Warren Buffett, created the most valuable position in Verisign, Inc. (NASDAQ:VRSN). Berkshire Hathaway had 143 million invested in the company at the end of the quarter. Barry Rosenstein’s JANA Partners also initiated a $119 million position during the quarter. The other funds with brand new VRSN positions are , James Crichton and Adam Weiss’s Scout Capital Management, and Christopher Lord’s Criterion Capital.
What do corporate executives and insiders think about Verisign, Inc. (NASDAQ:VRSN)?
Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Verisign, Inc. (NASDAQ:VRSN) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned tactics, everyday investors should always pay attention to hedge fund and insider trading activity, and Verisign, Inc. (NASDAQ:VRSN) is an important part of this process.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.