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Hedge Funds Are Selling Cornerstone OnDemand, Inc. (CSOD) – Konami Corp (ADR) (KNM), Shanda Games Limited(ADR) (GAME)

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Cornerstone OnDemand, Inc. (NASDAQ:CSOD) was in 10 hedge funds’ portfolio at the end of December. CSOD investors should pay attention to a decrease in support from the world’s most elite money managers of late. There were 12 hedge funds in our database with CSOD holdings at the end of the previous quarter.

Cornerstone OnDemand, Inc. (NASDAQ:CSOD)

If you’d ask most market participants, hedge funds are viewed as slow, outdated financial tools of the past. While there are greater than 8000 funds trading today, we look at the upper echelon of this group, close to 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total capital, and by paying attention to their top investments, we have figured out a number of 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 outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as integral, optimistic insider trading sentiment is a second way to break down the marketplace. There are many stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).

Now, it’s important to take a peek at the latest action encompassing Cornerstone OnDemand, Inc. (NASDAQ:CSOD).

How have hedgies been trading Cornerstone OnDemand, Inc. (NASDAQ:CSOD)?

Heading into 2013, a total of 10 of the hedge funds we track were bullish in this stock, a change of -17% from the third quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, Donald Chiboucis’s Columbus Circle Investors had the most valuable position in Cornerstone OnDemand, Inc. (NASDAQ:CSOD), worth close to $39 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Driehaus Capital, managed by Richard Driehaus, which held a $11 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Daniel Benton’s Andor Capital Management, Michael Novogratz’s Fortress Investment Group and Scott Fine and Peter Richards’s Empire Capital Management.

Seeing as Cornerstone OnDemand, Inc. (NASDAQ:CSOD) has experienced declining sentiment from the smart money, logic holds that there lies a certain “tier” of hedgies that slashed their full holdings in Q4. Intriguingly, Ken Griffin’s Citadel Investment Group cut the biggest stake of all the hedgies we key on, totaling about $12 million in stock.. Andrew Sandler’s fund, Sandler Capital Management, also said goodbye to its stock, about $7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds in Q4.

What have insiders been doing with Cornerstone OnDemand, Inc. (NASDAQ:CSOD)?

Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past half-year. Over the last six-month time period, Cornerstone OnDemand, Inc. (NASDAQ:CSOD) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Cornerstone OnDemand, Inc. (NASDAQ:CSOD). These stocks are Shanda Games Limited(ADR) (NASDAQ:GAME), Konami Corp (ADR) (NYSE:KNM), Rovi Corporation (NASDAQ:ROVI), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and Changyou.Com Ltd (ADR) (NASDAQ:CYOU). All of these stocks are in the multimedia & graphics software industry and their market caps are closest to CSOD’s market cap.

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