CSG Systems International, Inc. (CSGS): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

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Is CSG Systems International, Inc. (NASDAQ:CSGS) a good investment?

If you were to ask many market players, hedge funds are perceived as bloated, old investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds trading today, this site focuses on the elite of this club, around 525 funds. It is widely held that this group oversees the lion’s share of the hedge fund industry’s total assets, and by watching their highest quality picks, we’ve brought to light a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as key, bullish insider trading sentiment is another way to analyze the stock market universe. Just as you’d expect, there are lots of motivations for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).

CSG Systems International, Inc. (NASDAQ:CSGS)

Thus, it’s important to study the recent info about CSG Systems International, Inc. (NASDAQ:CSGS).

What have hedge funds been doing with CSG Systems International, Inc. (NASDAQ:CSGS)?

In preparation for the third quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

According to our 13F database, Jim Simons’s Renaissance Technologies had the most valuable position in CSG Systems International, Inc. (NASDAQ:CSGS), worth close to $33.6 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Mark Travis of Intrepid Capital Management, with a $19.9 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Ric Dillon’s Diamond Hill Capital, Cliff Asness’s AQR Capital Management and Anthony Bozza’s Lakewood Capital Management.

Due to the fact CSG Systems International, Inc. (NASDAQ:CSGS) has experienced declining interest from upper-tier hedge fund managers, logic holds that there was a specific group of fund managers that elected to cut their positions entirely heading into Q2. At the top of the heap, Robert B. Gillam’s McKinley Capital Management dumped the biggest investment of the 450+ funds we track, comprising an estimated $2.5 million in stock, and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund dropped about $0.6 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading CSG Systems International, Inc. (NASDAQ:CSGS)?

Insider buying is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, CSG Systems International, Inc. (NASDAQ:CSGS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to CSG Systems International, Inc. (NASDAQ:CSGS). These stocks are NetScout Systems, Inc. (NASDAQ:NTCT), Servicesource International Inc (NASDAQ:SREV), Descartes Systems Group (USA) (NASDAQ:DSGX), Ebix Inc (NASDAQ:EBIX), and Interactive Intelligence Group Inc (NASDAQ:ININ). This group of stocks are the members of the business software & services industry and their market caps are similar to CSGS’s market cap.

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