CommVault Systems, Inc. (NASDAQ:CVLT): Insiders Are Dumping, Should You?

CommVault Systems, Inc. (NASDAQ:CVLT) was in 14 hedge funds’ portfolio at the end of the fourth quarter of 2012. CVLT investors should be aware of a decrease in hedge fund interest recently. There were 14 hedge funds in our database with CVLT holdings at the end of the previous quarter.

CommVault Systems, Inc. (NASDAQ:CVLT)

In the 21st century investor’s toolkit, there are dozens of methods shareholders can use to monitor their holdings. A pair of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can trounce the market by a superb amount (see just how much).

Equally as integral, bullish insider trading activity is another way to break down the marketplace. As the old adage goes: there are lots of motivations for an executive to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).

Consequently, we’re going to take a glance at the latest action encompassing CommVault Systems, Inc. (NASDAQ:CVLT).

How are hedge funds trading CommVault Systems, Inc. (NASDAQ:CVLT)?

At the end of the fourth quarter, a total of 14 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Donald Chiboucis’s Columbus Circle Investors had the biggest position in CommVault Systems, Inc. (NASDAQ:CVLT), worth close to $106 million, comprising 0.9% of its total 13F portfolio. On Columbus Circle Investors’s heels is Renaissance Technologies, managed by Jim Simons, which held a $47 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Andrew Sandler’s Sandler Capital Management and Drew Cupps’s Cupps Capital Management.

Due to the fact that CommVault Systems, Inc. (NASDAQ:CVLT) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there is a sect of fund managers that slashed their entire stakes at the end of the year. Interestingly, Anand Parekh’s Alyeska Investment Group sold off the biggest stake of the 450+ funds we key on, worth about $6 million in call options. Israel Englander’s fund, Catapult Capital Management, also cut its stock, about $2 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading CommVault Systems, Inc. (NASDAQ:CVLT)?

Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time period, CommVault Systems, Inc. (NASDAQ:CVLT) has seen zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to CommVault Systems, Inc. (NASDAQ:CVLT). These stocks are Fortinet Inc (NASDAQ:FTNT), Cadence Design Systems Inc (NASDAQ:CDNS), Splunk Inc (NASDAQ:SPLK), MICROS Systems, Inc. (NASDAQ:MCRS), and Msci Inc (NYSE:MSCI). This group of stocks belong to the application software industry and their market caps resemble CVLT’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Fortinet Inc (NASDAQ:FTNT) 26 0 3
Cadence Design Systems Inc (NASDAQ:CDNS) 19 0 4
Splunk Inc (NASDAQ:SPLK) 22 0 8
MICROS Systems, Inc. (NASDAQ:MCRS) 18 0 1
Msci Inc (NYSE:MSCI) 13 0 0

With the returns demonstrated by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and CommVault Systems, Inc. (NASDAQ:CVLT) shareholders fit into this picture quite nicely.

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