Is BroadSoft Inc (NASDAQ:BSFT) worth your attention right now? Hedge funds are becoming less confident. The number of bullish hedge fund bets retreated by 1 recently.
According to most traders, hedge funds are perceived as worthless, old investment tools of years past. While there are greater than 8000 funds with their doors open at the moment, we choose to focus on the moguls of this club, about 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total asset base, and by tracking their highest performing investments, we have figured out a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, bullish insider trading activity is another way to break down the world of equities. There are lots of stimuli for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if shareholders understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the latest action encompassing BroadSoft Inc (NASDAQ:BSFT).
How have hedgies been trading BroadSoft Inc (NASDAQ:BSFT)?
Heading into Q2, a total of 12 of the hedge funds we track were bullish in this stock, a change of -8% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in BroadSoft Inc (NASDAQ:BSFT). Citadel Investment Group has a $9.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Lee Hobson of Highside Capital Management, with a $9.5 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Mark Kingdon’s Kingdon Capital, John Murphy’s Alydar Capital and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
Due to the fact that BroadSoft Inc (NASDAQ:BSFT) has witnessed bearish sentiment from hedge fund managers, logic holds that there were a few fund managers who were dropping their positions entirely in Q1. It’s worth mentioning that Matthew Iorio’s White Elm Capital dropped the largest investment of the 450+ funds we watch, comprising about $14.1 million in stock., and Alex Sacerdote of Whale Rock Capital Management was right behind this move, as the fund dumped about $8 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds in Q1.
How have insiders been trading BroadSoft Inc (NASDAQ:BSFT)?
Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time period, BroadSoft Inc (NASDAQ:BSFT) has seen 2 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to BroadSoft Inc (NASDAQ:BSFT). These stocks are FleetMatics Group PLC (NYSE:FLTX), Lifelock Inc (NYSE:LOCK), Demandware Inc (NYSE:DWRE), AVG Technologies NV (NYSE:AVG), and PROS Holdings, Inc. (NYSE:PRO). This group of stocks belong to the application software industry and their market caps match BSFT’s market cap.