Is Ciena Corporation (NASDAQ:CIEN) a good investment?
In the financial world, there are many methods investors can use to monitor publicly traded companies. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can trounce the broader indices by a healthy margin (see just how much).
Just as key, positive insider trading sentiment is another way to look at the investments you’re interested in. Obviously, there are plenty of reasons for an insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if you know where to look (learn more here).
What’s more, we’re going to analyze the recent info about Ciena Corporation (NASDAQ:CIEN).
What have hedge funds been doing with Ciena Corporation (NASDAQ:CIEN)?
Heading into Q3, a total of 23 of the hedge funds we track were long in this stock, a change of -15% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings considerably.
Because Ciena Corporation (NASDAQ:CIEN) has faced declining interest from the smart money’s best and brightest, it’s safe to say that there was a specific group of hedgies that decided to sell off their entire stakes heading into Q2. At the top of the heap, Mariko Gordon’s Daruma Asset Management sold off the largest stake of all the hedgies we monitor, comprising an estimated $41.3 million in stock, and Charles Clough of Clough Capital Partners was right behind this move, as the fund dumped about $9.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 4 funds heading into Q2.
What do corporate executives and insiders think about Ciena Corporation (NASDAQ:CIEN)?
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time frame, Ciena Corporation (NASDAQ:CIEN) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Ciena Corporation (NASDAQ:CIEN). These stocks are NetGear, Inc. (NASDAQ:NTGR), Exelis Inc (NYSE:XLS), Acme Packet, Inc. (NASDAQ:APKT), Loral Space & Communications Ltd. (NASDAQ:LORL), and Arris Group, Inc. (NASDAQ:ARRS). This group of stocks are the members of the communication equipment industry and their market caps match CIEN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| NetGear, Inc. (NASDAQ:NTGR) | 12 | 0 | 0 |
| Exelis Inc (NYSE:XLS) | 24 | 0 | 0 |
| Acme Packet, Inc. (NASDAQ:APKT) | 22 | 0 | 0 |
| Loral Space & Communications Ltd. (NASDAQ:LORL) | 24 | 0 | 0 |
| Arris Group, Inc. (NASDAQ:ARRS) | 20 | 0 | 0 |
Using the returns explained by our analyses, average investors must always pay attention to hedge fund and insider trading sentiment, and Ciena Corporation (NASDAQ:CIEN) shareholders fit into this picture quite nicely.
