Xyratex Ltd. (NASDAQ:XRTX) was in 9 hedge funds' portfolio at the end of March. XRTX shareholders have witnessed an increase in activity from the world's largest hedge funds of late. There were 8 hedge funds in our database with XRTX positions at the end of the previous quarter.
According to most investors, hedge funds are seen as unimportant, old financial vehicles of years past. While there are over 8000 funds trading at present, we hone in on the crème de la crème of this club, close to 450 funds. It is estimated that this group oversees the lion's share of the smart money's total capital, and by watching their top stock picks, we have brought to light a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as integral, optimistic insider trading activity is another way to parse down the financial markets. As the old adage goes: there are plenty of stimuli for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this tactic if piggybackers understand what to do (learn more here).
Keeping this in mind, we're going to take a glance at the key action encompassing Xyratex Ltd. (NASDAQ:XRTX).
At Q1's end, a total of 9 of the hedge funds we track were bullish in this stock, a change of 13% from one quarter earlier.
As aggregate interest increased, key hedge funds have jumped into Xyratex Ltd. (NASDAQ:XRTX) headfirst. Renaissance Technologies, managed by Jim Simons, initiated the most valuable position in Xyratex Ltd. (NASDAQ:XRTX). Renaissance Technologies had 1.5 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new XRTX investors: Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk's GRT Capital Partners and Matthew Hulsizer's PEAK6 Capital Management.
Insider buying is most useful when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Xyratex Ltd. (NASDAQ:XRTX) 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 Xyratex Ltd. (NASDAQ:XRTX). These stocks are OCZ Technology Group Inc. (NASDAQ:OCZ), Imation Corp. (NYSE:IMN), STEC, Inc. (NASDAQ:STEC), Datalink Corporation (NASDAQ:DTLK), and Quantum Corp (NYSE:QTM). This group of stocks are the members of the data storage devices industry and their market caps are closest to XRTX's market cap.