Allot Communications Ltd. (NASDAQ:ALLT) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. ALLT has experienced a decrease in hedge fund sentiment recently. There were 11 hedge funds in our database with ALLT holdings at the end of the previous quarter.
In today’s marketplace, there are a multitude of gauges investors can use to watch publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can trounce the broader indices by a very impressive margin (see just how much).
Just as important, optimistic insider trading sentiment is a second way to break down the marketplace. Obviously, there are lots of incentives for an insider to cut shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this tactic if you know where to look (learn more here).
Consequently, let’s take a look at the recent action encompassing Allot Communications Ltd. (NASDAQ:ALLT).
What does the smart money think about Allot Communications Ltd. (NASDAQ:ALLT)?
At year’s end, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Alydar Capital, managed by John Murphy, holds the biggest position in Allot Communications Ltd. (NASDAQ:ALLT). Alydar Capital has a $30.5 million position in the stock, comprising 2.4% of its 13F portfolio. Sitting at the No. 2 spot is Columbus Circle Investors, managed by Donald Chiboucis, which held a $13.4 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Mike Vranos’s Ellington.
Judging by the fact that Allot Communications Ltd. (NASDAQ:ALLT) has faced a declination in interest from the smart money, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their full holdings last quarter. At the top of the heap, Drew Cupps’s Cupps Capital Management cut the biggest investment of the “upper crust” of funds we key on, totaling an estimated $7.9 million in stock.. Richard Driehaus’s fund, Driehaus Capital, also cut its stock, about $5.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds last quarter.
How have insiders been trading Allot Communications Ltd. (NASDAQ:ALLT)?
Insider buying is best served when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, Allot Communications Ltd. (NASDAQ:ALLT) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Allot Communications Ltd. (NASDAQ:ALLT). These stocks are Exfo Inc (NASDAQ:EXFO), Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), Comtech Telecomm. Corp. (NASDAQ:CMTL), Calix Inc (NYSE:CALX), and CalAmp Corp. (NASDAQ:CAMP). This group of stocks are in the communication equipment industry and their market caps are closest to ALLT’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|
|CalAmp Corp. (NASDAQ:CAMP)||14||0||5|
With the returns exhibited by our tactics, retail investors must always watch hedge fund and insider trading activity, and Allot Communications Ltd. (NASDAQ:ALLT) is an important part of this process.