VirnetX Holding Corporation (NYSEAMEX:VHC) has seen a decrease in hedge fund interest in recent months.
To most stock holders, hedge funds are seen as worthless, old financial vehicles of yesteryear. While there are over 8000 funds trading at present, we hone in on the moguls of this club, around 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by watching their top investments, we have deciphered a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as beneficial, optimistic insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are a variety of motivations for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).
With all of this in mind, we’re going to take a gander at the key action encompassing VirnetX Holding Corporation (NYSEAMEX:VHC).
What have hedge funds been doing with VirnetX Holding Corporation (NYSEAMEX:VHC)?
In preparation for this year, a total of 6 of the hedge funds we track were bullish in this stock, a change of -14% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Eric Bannasch’s Cadian Capital had the biggest position in VirnetX Holding Corporation (NYSEAMEX:VHC), worth close to $36.1 million, accounting for 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $6.4 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Daniel S. Och’s OZ Management, and Daniel S. Och’s OZ Management.
Seeing as VirnetX Holding Corporation (NYSEAMEX:VHC) has experienced a declination in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies that slashed their positions entirely in Q4. Interestingly, D. E. Shaw’s D E Shaw dropped the largest stake of all the hedgies we key on, worth close to $2.4 million in stock.. Chuck Royce’s fund, Royce & Associates, also sold off its stock, about $0.6 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds in Q4.
How are insiders trading VirnetX Holding Corporation (NYSEAMEX:VHC)?
Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past six months. Over the latest six-month time period, VirnetX Holding Corporation (NYSEAMEX:VHC) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to VirnetX Holding Corporation (NYSEAMEX:VHC). These stocks are J2 Global Inc (NASDAQ:JCOM), ExactTarget Inc (NYSE:ET), Demand Media Inc (NYSE:DMD), DealerTrack Technologies Inc (NASDAQ:TRAK), and Angie’s List Inc (NASDAQ:ANGI). This group of stocks are the members of the internet software & services industry and their market caps match VHC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|J2 Global Inc (NASDAQ:JCOM)||10||0||5|
|ExactTarget Inc (NYSE:ET)||9||2||17|
|Demand Media Inc (NYSE:DMD)||8||0||2|
|DealerTrack Technologies Inc (NASDAQ:TRAK)||9||0||8|
|Angie’s List Inc (NASDAQ:ANGI)||9||0||6|
With the returns exhibited by the aforementioned time-tested strategies, retail investors must always monitor hedge fund and insider trading sentiment, and VirnetX Holding Corporation (NYSEAMEX:VHC) shareholders fit into this picture quite nicely.