Insiders and Jim Simons Into IT Services

Small and micro-cap tech companies can provide great returns for those bold enough to bet on them. However, choosing one to invest in is quite a difficult task. Insider purchases can help us decide, as they can be interpreted as a strong bullish sentiment from someone who has inside information on the company´s operations, and is betting on it instead of diversifying its stakes.

Over the past weeks, two IT service providers, Carbonite Inc (NASDAQ: CARB) and PFSweb, Inc. (NASDAQ:PFSW), have been experiencing some noteworthy insider activity. Let´s take a closer look in order to elucidate if they could help you find a value investment in any of these two stocks:

RENAISSANCE TECHNOLOGIES

A Small-Cap Option

Carbonite Inc (NASDAQ:CARB) is a developer and provider of online accessible computer backup software with a market cap of approximately $323 million. Over the last couple of weeks, following the release of its 8-K report on Nov. 12th, its CEO and President, David Friend, and one of its Board Directors, Todd Krasnow, added stock to their portfolios.

Mr. Friend bought 58,871 shares on Nov. 12th: 11,249 for $2.64 each, using stock options he held; 44,063 for $9.62 per share; and 3,559 for $10.26 a piece. On top of this, he used some more of his stock options on Nov. 14th, and added 3,751 shares to his portfolio for $2.64 each. He now holds 969,762 shares, worth roughly $11.9 million.

Krasnow also acquired Carbonite Inc (NASDAQ:CARB) shares lately. On Nov 20th, he purchased 37,000 shares in multiple transactions at prices ranging from $11.04 to $11.50, inclusive. He now owns (counting directly and indirectly owned stock) 294,771 shares of the company.

A Micro-Cap Option

PFSweb, Inc. (NASDAQ: PFSW) provides integrated eCommerce and business process outsourcing solutions to developing countries. Its market cap barely surpasses $140 million. However, insiders do not seem to care about its size. After the company reported its third quarter 2013 results, on Nov. 15th, F James Reilly, Director of the Board, and Transcosmos Inc., large shareholder, added stock to their holdings.

Mr. Reilly bought 20,000 shares on the day that the 8-K form was filed at the SEC. He paid an average price of $7.54 per share; the stock is already trading at around $8.59. Following the reported transaction, the board director owns 40,512 shares of the company.

On the other hand, Transcosmos bought 3,578 shares on Nov. 15th, for an average price of $7.4785 each. The shareholder continued to increase its stake in the company, and added stock again on Nov 19th (400 shares), 20th (16,904) and 21st (7,274) on prices ranging from $7.50 to $8.00 per share. Transcosmos now owns 3,242,525 shares, valued at about $27.5 million.

Hedge Fund Bulls

In addition to insiders, hedge funds also seem to be quite into these IT companies. For instance, Jim Simons´ Renaissance Technologies is the largest “hedgie” bull on PFSweb, Inc. (NASDAQ:PFSW) -holding about $3 million worth of shares- and the fourth largest bull on Carbonite Inc (NASDAQ:CARB), with about $2 million in shares. Matthew Drapkin and Steven R. Becker´s Becker Drapkin Management is also placing big bets on PFSweb. Its holdings, worth about $2 million, account for almost 1.5% of its portfolio.

Back to Carbonite: amongst the hedge funds that we track, two are particularly bullish on this company. Seymour Sy Kaufman and Michael Stark´s Crosslink Capital owns about $26 million in shares, and Mark N. Diker´s Diker Management, another $15 million.

After reviewing these positions, one question emerges: if insiders and hedge funds are betting on these small-cap IT services firms, should you?

Disclosure: none

Recommended Reading:

Why Are Insiders Betting on These Distressed Communication Equipment Stocks

Insiders are Crazy About USA Synthetic Fuel Corp

Omnitek Engineering Corp Is Grasping for Breath while Tumbling Down

 

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!