Is Quantum Corp (NYSE:QTM) a great investment now? Investors who are in the know are in a pessimistic mood. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience
In the 21st century investor’s toolkit, there are a multitude of methods shareholders can use to watch Mr. Market. A pair of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outperform the broader indices by a superb amount (see just how much).
Just as integral, optimistic insider trading activity is a second way to break down the financial markets. Obviously, there are a variety of stimuli for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this method if "monkeys" know what to do (learn more here).
With all of this in mind, it's important to take a glance at the latest action encompassing Quantum Corp (NYSE:QTM).
At the end of the first quarter, a total of 11 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With the smart money's sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings meaningfully.
According to our comprehensive database, Jeffrey Smith's Starboard Value LP had the most valuable position in Quantum Corp (NYSE:QTM), worth close to $30.7 million, comprising 2.8% of its total 13F portfolio. Sitting at the No. 2 spot is Private Capital Management, managed by Gregg J. Powers, which held a $25.9 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Brett Hendrickson's Nokomis Capital, Stuart Peterson's Artis Capital Management and Cliff Asness's AQR Capital Management.
Judging by the fact that Quantum Corp (NYSE:QTM) has witnessed a declination in interest from hedge fund managers, it's safe to say that there exists a select few money managers that elected to cut their positions entirely last quarter. It's worth mentioning that Ken Griffin's Citadel Investment Group cut the biggest stake of the "upper crust" of funds we track, valued at close to $0 million in stock. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider purchases made by high-level executives is best served when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time frame, Quantum Corp (NYSE:QTM) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to Quantum Corp (NYSE:QTM). These stocks are Imation Corp. (NYSE:IMN), Emulex Corporation (NYSE:ELX), STEC, Inc. (NASDAQ:STEC), Datalink Corporation (NASDAQ:DTLK), and Xyratex Ltd. (NASDAQ:XRTX). All of these stocks are in the data storage devices industry and their market caps match QTM's market cap.