Hedge Funds Aren’t Crazy About Virtusa Corporation (VRTU) Anymore

Seeing as Virtusa Corporation (NASDAQ:VRTU) has experienced a decline in interest from the entirety of the hedge funds we track, logic holds that there exists a select few money managers who were dropping their positions entirely heading into Q4. Interestingly, Renaissance Technologies, one of the biggest hedge funds in the world, dropped the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $3.8 million in stock. Paul Hondros’s fund, AlphaOne Capital Partners, also sold off its stock, about $1.9 million worth of VRTU shares.

Let’s also examine hedge fund activity in other stocks similar to Virtusa Corporation (NASDAQ:VRTU). We will take a look at CEVA, Inc. (NASDAQ:CEVA), Speedway Motorsports, Inc. (NYSE:TRK), Piper Jaffray Companies (NYSE:PJC), and Silver Spring Networks Inc (NYSE:SSNI). This group of stocks’ market values are closest to VRTU’s market value.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $18 million in VRTU’s case. CEVA, Inc. (NASDAQ:CEVA) is the most popular stock in this table. On the other hand Piper Jaffray Companies (NYSE:PJC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Virtusa Corporation (NASDAQ:VRTU) is even less popular than PJC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: none.