Is NetSuite Inc (NYSE:N) a buy here? Money managers are getting less optimistic. The number of bullish hedge fund positions retreated by 1 lately.
To the average investor, there are many methods shareholders can use to track stocks. A pair of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the broader indices by a superb amount (see just how much).
Just as important, bullish insider trading sentiment is another way to break down the world of equities. There are many stimuli for an insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this method if you know where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the key action surrounding NetSuite Inc (NYSE:N).
What have hedge funds been doing with NetSuite Inc (NYSE:N)?
Heading into 2013, a total of 14 of the hedge funds we track held long positions in this stock, a change of -7% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, Donald Chiboucis’s Columbus Circle Investors had the largest position in NetSuite Inc (NYSE:N), worth close to $51.6 million, accounting for 0.4% of its total 13F portfolio. The second largest stake is held by Drew Cupps of Cupps Capital Management, with a $36.8 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Christopher Lord’s Criterion Capital, John Thaler’s JAT Capital Management and SAC Subsidiary’s CR Intrinsic Investors.
Seeing as NetSuite Inc (NYSE:N) has experienced declining sentiment from hedge fund managers, logic holds that there exists a select few funds who were dropping their positions entirely heading into 2013. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest position of the “upper crust” of funds we watch, totaling about $10.2 million in stock.. Richard Driehaus’s fund, Driehaus Capital, also said goodbye to its stock, about $4.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into 2013.
What do corporate executives and insiders think about NetSuite Inc (NYSE:N)?
Insider buying is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, NetSuite Inc (NYSE:N) has seen zero unique insiders purchasing, and 11 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to NetSuite Inc (NYSE:N). These stocks are Jack Henry & Associates, Inc. (NASDAQ:JKHY), Solera Holdings Inc (NYSE:SLH), Total System Services, Inc. (NYSE:TSS), Iron Mountain Incorporated (NYSE:IRM), and Amdocs Limited (NYSE:DOX). This group of stocks belong to the business software & services industry and their market caps are similar to N’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Jack Henry & Associates, Inc. (NASDAQ:JKHY) | 13 | 1 | 2 |
| Solera Holdings Inc (NYSE:SLH) | 6 | 0 | 4 |
| Total System Services, Inc. (NYSE:TSS) | 16 | 0 | 9 |
| Iron Mountain Incorporated (NYSE:IRM) | 21 | 0 | 2 |
| Amdocs Limited (NYSE:DOX) | 17 | 0 | 0 |
With the returns shown by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading activity, and NetSuite Inc (NYSE:N) applies perfectly to this mantra.
