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salesforce.com, inc. (NYSE:CRM): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

Salesforce.com (CRM)salesforce.com, inc. (NYSE:CRM) has seen a decrease in hedge fund interest of late.

In today’s marketplace, there are plenty of metrics investors can use to monitor Mr. Market. A duo of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outperform the S&P 500 by a superb amount (see just how much).

Just as beneficial, optimistic insider trading activity is a second way to parse down the marketplace. Obviously, there are many incentives for an executive to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this method if piggybackers know what to do (learn more here).

Keeping this in mind, we’re going to take a look at the key action regarding salesforce.com, inc. (NYSE:CRM).

What have hedge funds been doing with salesforce.com, inc. (NYSE:CRM)?

In preparation for this year, a total of 35 of the hedge funds we track held long positions in this stock, a change of -15% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in salesforce.com, inc. (NYSE:CRM). Renaissance Technologies has a $146 million billion position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Donald Chiboucis of Columbus Circle Investors, with a $125 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Christopher MedlockáJames’s Partner Fund Management, David Stemerman’s Conatus Capital Management and Steven Cohen’s SAC Capital Advisors.

Since salesforce.com, inc. (NYSE:CRM) has experienced a declination in interest from the smart money, we can see that there exists a select few funds that decided to sell off their entire stakes heading into 2013. Interestingly, Ken Griffin’s Citadel Investment Group dropped the biggest stake of the “upper crust” of funds we monitor, totaling close to $84 million in stock.. John Hurley’s fund, Cavalry Asset Management, also sold off its stock, about $56 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds heading into 2013.

How are insiders trading salesforce.com, inc. (NYSE:CRM)?

Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past 180 days. Over the last half-year time frame, salesforce.com, inc. (NYSE:CRM) has seen 1 unique insiders purchasing, and 15 insider sales (see the details of insider trades here).

With the results demonstrated by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and salesforce.com, inc. (NYSE:CRM) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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