iSoftStone Holdings Ltd (ADR) (NYSE:ISS) has experienced a decrease in enthusiasm from smart money lately.
To most stock holders, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey choose to focus on the upper echelon of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds' total capital, and by keeping an eye on their highest performing picks, we have revealed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as important, bullish insider trading activity is another way to parse down the world of equities. There are plenty of incentives for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this method if you know what to do (learn more here).
Consequently, we're going to take a gander at the latest action encompassing iSoftStone Holdings Ltd (ADR) (NYSE:ISS).
Heading into 2013, a total of 5 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.
Of the funds we track, Stephen Mandel's Lone Pine Capital had the most valuable position in iSoftStone Holdings Ltd (ADR) (NYSE:ISS), worth close to $22.4 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Altai Capital, managed by Rishi Bajaj, Toby Symonds, and Steve Tesoriere, which held a $2.7 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Richard Chilton's Chilton Investment Company, D. E. Shaw's D E Shaw and Jim Simons's Renaissance Technologies.
Insider trading activity, especially when it's bullish, is best served when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, iSoftStone Holdings Ltd (ADR) (NYSE:ISS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to iSoftStone Holdings Ltd (ADR) (NYSE:ISS). These stocks are Digimarc Corp (NASDAQ:DMRC), Greenway Medical Technologies, Inc. (NYSE:GWAY), Computer Task Group, Inc. (NASDAQ:CTGX), Boingo Wireless Inc (NASDAQ:WIFI), and CIBER, Inc. (NYSE:CBR). All of these stocks are in the information technology services industry and their market caps match ISS's market cap.