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Hedge Funds Aren’t Crazy About Qualys Inc (QLYS) Anymore

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Is Qualys Inc (NASDAQ:QLYS) a bargain? The best stock pickers are in a bearish mood. The number of bullish hedge fund positions went down by 1 lately.

To most investors, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are over 8000 funds with their doors open at present, we look at the crème de la crème of this group, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total capital, and by keeping an eye on their highest performing stock picks, we have spotted a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as beneficial, bullish insider trading activity is a second way to break down the world of equities. Just as you’d expect, there are many motivations for an insider to drop shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).

Keeping this in mind, it’s important to take a look at the latest action encompassing Qualys Inc (NASDAQ:QLYS).

What have hedge funds been doing with Qualys Inc (NASDAQ:QLYS)?

In preparation for this quarter, a total of 5 of the hedge funds we track were long in this stock, a change of -17% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.


When looking at the hedgies we track, Panayotis Takis Sparaggis’s Alkeon Capital Management had the largest position in Qualys Inc (NASDAQ:QLYS), worth close to $8.8 million, accounting for 0.2% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $8.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Brian Ashford-Russell and Tim Woolley’s Polar Capital, Brian Taylor’s Pine River Capital Management and Israel Englander’s Millennium Management.

Judging by the fact that Qualys Inc (NASDAQ:QLYS) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers that slashed their full holdings last quarter. Intriguingly, Wojciech Uzdelewicz’s Espalier Global Management dropped the largest position of the “upper crust” of funds we monitor, worth close to $3.2 million in stock., and Richard Driehaus of Driehaus Capital was right behind this move, as the fund cut about $1.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds last quarter.

How are insiders trading Qualys Inc (NASDAQ:QLYS)?

Insider buying is at its handiest when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time period, Qualys Inc (NASDAQ:QLYS) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Qualys Inc (NASDAQ:QLYS). These stocks are Responsys Inc (NASDAQ:MKTG), Incontact Inc (NASDAQ:SAAS), NQ Mobile Inc (ADR) (NYSE:NQ), ePlus Inc. (NASDAQ:PLUS), and SeaChange International (NASDAQ:SEAC). All of these stocks are in the application software industry and their market caps are similar to QLYS’s market cap.

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