Sapient Corporation (NASDAQ:SAPE) has seen a decrease in activity from the world’s largest hedge funds recently.
To most traders, hedge funds are perceived as slow, old financial tools of years past. While there are over 8000 funds with their doors open at present, we at Insider Monkey look at the moguls of this group, around 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by keeping an eye on their best equity investments, we have figured out a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as important, bullish insider trading sentiment is a second way to parse down the stock market universe. There are a number of reasons for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).
Now, it’s important to take a look at the latest action regarding Sapient Corporation (NASDAQ:SAPE).
What does the smart money think about Sapient Corporation (NASDAQ:SAPE)?
At Q1’s end, a total of 15 of the hedge funds we track held long positions in this stock, a change of -12% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Sapient Corporation (NASDAQ:SAPE). Royce & Associates has a $43 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is Blue Harbour Group, managed by Clifton S. Robbins, which held a $23.9 million position; 2.4% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Ken Fisher’s Fisher Asset Management, Ken Griffin’s Citadel Investment Group and Wallace Weitz’s Wallace R. Weitz & Co..
Judging by the fact that Sapient Corporation (NASDAQ:SAPE) has witnessed declining sentiment from hedge fund managers, we can see that there were a few fund managers who sold off their entire stakes at the end of the first quarter. Intriguingly, Glenn J. Krevlin’s Glenhill Advisors cut the largest stake of all the hedgies we watch, worth an estimated $2.2 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund dropped about $0.6 million worth. These moves are important to note, as aggregate hedge fund interest fell by 2 funds at the end of the first quarter.
What do corporate executives and insiders think about Sapient Corporation (NASDAQ:SAPE)?
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Sapient Corporation (NASDAQ:SAPE) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Sapient Corporation (NASDAQ:SAPE). These stocks are Qlik Technologies Inc (NASDAQ:QLIK), Guidewire Software Inc (NYSE:GWRE), Blackbaud, Inc. (NASDAQ:BLKB), Verint Systems Inc. (NASDAQ:VRNT), and Convergys Corporation (NYSE:CVG). This group of stocks are in the business software & services industry and their market caps are closest to SAPE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Qlik Technologies Inc (NASDAQ:QLIK) | 22 | 0 | 5 |
| Guidewire Software Inc (NYSE:GWRE) | 14 | 1 | 10 |
| Blackbaud, Inc. (NASDAQ:BLKB) | 6 | 0 | 5 |
| Verint Systems Inc. (NASDAQ:VRNT) | 29 | 0 | 6 |
| Convergys Corporation (NYSE:CVG) | 11 | 0 | 4 |
With the returns demonstrated by our studies, retail investors must always watch hedge fund and insider trading activity, and Sapient Corporation (NASDAQ:SAPE) shareholders fit into this picture quite nicely.
