Ellie Mae Inc (NYSE:ELLI) shareholders have witnessed a decrease in enthusiasm from smart money recently.
In today’s marketplace, there are a multitude of gauges investors can use to watch their holdings. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a very impressive margin (see just how much).
Equally as important, optimistic insider trading activity is another way to break down the financial markets. Just as you'd expect, there are a number of reasons for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if you know what to do (learn more here).
Keeping this in mind, we're going to take a gander at the recent action surrounding Ellie Mae Inc (NYSE:ELLI).
Heading into 2013, a total of 12 of the hedge funds we track were long in this stock, a change of -25% from the previous quarter. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Driehaus Capital, managed by Richard Driehaus, holds the biggest position in Ellie Mae Inc (NYSE:ELLI). Driehaus Capital has a $25 million position in the stock, comprising 1% of its 13F portfolio. The second largest stake is held by ZWEIG DIMENNA PARTNERS, managed by Joe DiMenna, which held a $21 million position; 1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Donald Chiboucis's Columbus Circle Investors, Jim Simons's Renaissance Technologies and Philip Hempleman's Ardsley Partners.
Seeing as Ellie Mae Inc (NYSE:ELLI) has experienced a declination in interest from hedge fund managers, it's safe to say that there lies a certain "tier" of fund managers that decided to sell off their entire stakes last quarter. Interestingly, Matthew Iorio's White Elm Capital sold off the largest investment of all the hedgies we key on, comprising an estimated $2 million in stock., and Eric Semler of TCS Capital Management was right behind this move, as the fund sold off about $2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 4 funds last quarter.
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Ellie Mae Inc (NYSE:ELLI) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Ellie Mae Inc (NYSE:ELLI) shareholders fit into this picture quite nicely.
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