In the eyes of many of your fellow readers, hedge funds are assumed to be delayed, outdated investment vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds trading in present day, this site looks at the masters of this club, around 525 funds. It is assumed that this group controls the lion's share of the smart money's total assets, and by paying attention to their highest quality picks, we've revealed a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as crucial, optimistic insider trading sentiment is another way to look at the stock market universe. There are lots of stimuli for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).
What's more, we're going to analyze the recent info for Compuware Corporation (NASDAQ:CPWR).
In preparation for the third quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of -4% from the previous quarter. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably.
According to our 13F database, Elliott Management, managed by Paul Singer, holds the most valuable position in Compuware Corporation (NASDAQ:CPWR). Elliott Management has a $193 million position in the stock, comprising 3.7% of its 13F portfolio. On Elliott Management's heels is Jeffrey Smith of Starboard Value LP, with a $98.2 million position; 6.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Jonathon Jacobson's Highfields Capital Management, Steven Cohen's SAC Capital Advisors and Tom Sandell's Sandell Asset Management.
Because Compuware Corporation (NASDAQ:CPWR) has faced dropping sentiment from the top-tier hedge fund industry, logic holds that there was a specific group of funds that slashed their full holdings in Q1. Interestingly, Jim Roumell's Roumell Asset Management cut the largest investment of all the hedgies we watch, comprising about $7 million in call options., and SAC Subsidiary of CR Intrinsic Investors was right behind this move, as the fund said goodbye to about $1.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds in Q1.
Bullish insider trading is best served when the company we're looking at has seen transactions within the past half-year. Over the latest half-year time period, Compuware Corporation (NASDAQ:CPWR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to Compuware Corporation (NASDAQ:CPWR). These stocks are Fortinet Inc (NASDAQ:FTNT), CommVault Systems, Inc. (NASDAQ:CVLT), Diebold Incorporated (NYSE:DBD), MICROS Systems, Inc. (NASDAQ:MCRS), and Open Text Corporation (USA) (NASDAQ:OTEX). This group of stocks are in the application software industry and their market caps resemble CPWR's market cap.