Is Fortinet Inc (FTNT) Going to Burn You?

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Fortinet Inc (NASDAQ:FTNT) investors: listen up.

At the moment, there are plenty of indicators investors can use to analyze stocks. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass their index-focused peers by a very impressive amount (see just how much).

Fortinet Inc (NASDAQ:FTNT)

Equally as key, bullish insider trading activity is another way to analyze the financial markets. There are lots of reasons for an executive to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if piggybackers understand what to do (learn more here).

What’s more, let’s examine the latest info about Fortinet Inc (NASDAQ:FTNT).

What does the smart money think about Fortinet Inc (NASDAQ:FTNT)?

At the end of the second quarter, a total of 27 of the hedge funds we track were bullish in this stock, a change of -31% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably.

Out of the hedge funds we follow, Lee Ainslie’s Maverick Capital had the largest position in Fortinet Inc (NASDAQ:FTNT), worth close to $208.7 million, comprising 2.8% of its total 13F portfolio. The second largest stake is held by Eminence Capital, managed by Ricky Sandler, which held a $59.3 million position; 1.5% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include John Lykouretzos’s Hoplite Capital Management, Brett Barakett’s Tremblant Capital and D. E. Shaw’s D E Shaw.

Since Fortinet Inc (NASDAQ:FTNT) has experienced dropping sentiment from the top-tier hedge fund industry, it’s easy to see that there was a specific group of hedgies who were dropping their entire stakes in Q1. Interestingly, Josh Resnick’s Jericho Capital Asset Management sold off the biggest stake of the 450+ funds we track, comprising close to $23 million in stock, and Andrew Sandler of Sandler Capital Management was right behind this move, as the fund dropped about $21.7 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 12 funds in Q1.

How are insiders trading Fortinet Inc (NASDAQ:FTNT)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time period, Fortinet Inc (NASDAQ:FTNT) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Fortinet Inc (NASDAQ:FTNT). These stocks are Msci Inc (NYSE:MSCI), MICROS Systems, Inc. (NASDAQ:MCRS), Splunk Inc (NASDAQ:SPLK), Cadence Design Systems Inc (NASDAQ:CDNS), and CommVault Systems, Inc. (NASDAQ:CVLT). This group of stocks are in the application software industry and their market caps match FTNT’s market cap.

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