CalAmp Corp. (NASDAQ:CAMP) investors should be aware of a decrease in hedge fund interest in recent months.
To most market participants, hedge funds are perceived as slow, old financial tools of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the leaders of this club, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total asset base, and by watching their top picks, we have found a few investment strategies that have historically outpaced the S&P 500 index. 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as integral, bullish insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are many reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).
With these “truths” under our belt, let’s take a look at the recent action encompassing CalAmp Corp. (NASDAQ:CAMP).
How are hedge funds trading CalAmp Corp. (NASDAQ:CAMP)?
At the end of the fourth quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Mark Broach’s Manatuck Hill Partners had the biggest position in CalAmp Corp. (NASDAQ:CAMP), worth close to $7 million, comprising 1% of its total 13F portfolio. The second largest stake is held by Robert B. Gillam of McKinley Capital Management, with a $5 million position; 0.7% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Phil Frohlich’s Prescott Group Capital Management and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Because CalAmp Corp. (NASDAQ:CAMP) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds that elected to cut their positions entirely heading into 2013. Interestingly, D. E. Shaw’s D E Shaw dropped the largest investment of the “upper crust” of funds we key on, valued at close to $0 million in stock. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading CalAmp Corp. (NASDAQ:CAMP)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, CalAmp Corp. (NASDAQ:CAMP) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to CalAmp Corp. (NASDAQ:CAMP). These stocks are Exfo Inc (NASDAQ:EXFO), Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), Comtech Telecomm. Corp. (NASDAQ:CMTL), Calix Inc (NYSE:CALX), and Allot Communications Ltd. (NASDAQ:ALLT). This group of stocks are in the communication equipment industry and their market caps match CAMP’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Exfo Inc (NASDAQ:EXFO)||2||0||0|
|Sierra Wireless, Inc. (USA) (NASDAQ:SWIR)||8||0||0|
|Comtech Telecomm. Corp. (NASDAQ:CMTL)||11||0||1|
|Calix Inc (NYSE:CALX)||12||1||1|
|Allot Communications Ltd. (NASDAQ:ALLT)||10||0||0|
With the returns exhibited by the aforementioned studies, retail investors should always keep an eye on hedge fund and insider trading activity, and CalAmp Corp. (NASDAQ:CAMP) is no exception.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.