Cyren Ltd (CYRN): How Are Hedge Funds Trading This Micro-Cap?

We can judge whether Cyren Ltd (NASDAQ:CYRN) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.

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Is Cyren Ltd (NASDAQ:CYRN) going to take off soon? Hedge funds are turning bullish. The number of long hedge fund positions went up by two lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Barington/Hilco Acquisition Corp. Common Stock (NASDAQ:BHAC), Vringo, Inc. (NASDAQ:VRNG), and LRAD Corp (NASDAQ:LRAD) to gather more data points.

According to most traders, hedge funds are viewed as slow, outdated investment vehicles of the past. While there are more than 8,000 funds in operation today, hedge fund experts at Insider Monkey choose to focus on the moguls of this club, about 700 funds. These money managers administer the majority of the hedge fund industry’s total asset base, and by monitoring their inimitable picks, Insider Monkey has unsheathed numerous investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in its backtests.

Now, let’s review the fresh action surrounding Cyren Ltd (NASDAQ:CYRN).

How have hedgies been trading Cyren Ltd (NASDAQ:CYRN)?

Heading into Q4, a total of five of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 67% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

When looking at the hedgies followed by Insider Monkey, Diker Management, managed by Mark N. Diker, holds the most valuable position in Cyren Ltd (NASDAQ:CYRN). Diker Management has a $9.1 million position in the stock, comprising 2% of its 13F portfolio. The second-most bullish hedge fund manager is Renaissance Technologies, managed by Jim Simons, which holds a $0.9 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Adam Wright and Gary Kohler’s Blue Clay Capital, Richard Mashaal’s Rima Senvest Management, and Ken Griffin’s Citadel Investment Group.

As one would reasonably expect, specific money managers were breaking ground themselves. Blue Clay Capital initiated the largest position in Cyren Ltd (NASDAQ:CYRN). Blue Clay Capital had $0.4 million invested in the company at the end of the quarter. Rima Senvest Management also made a $0.3 million investment in the stock during the quarter.

Let’s also review hedge fund activity in other stocks similar to Cyren Ltd (NASDAQ:CYRN). These stocks are Barington/Hilco Acquisition Corp. Common Stock (NASDAQ:BHAC), Vringo, Inc. (NASDAQ:VRNG), LRAD Corp (NASDAQ:LRAD), and Palatin Technologies, Inc. (NYSEMKT:PTN). All of these stocks’ market caps are closest to Cyren Ltd (NASDAQ:CYRN)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BHAC 4 5896 0
VRNG 4 997 0
LRAD 5 7269 0
PTN 6 7524 1

As you can see these stocks had an average of five hedge funds with bullish positions and the average amount invested in these stocks was $5 million, less than half of the $11 million invested in Cyren. Palatin Technologies, Inc. (NYSEMKT:PTN) is the most popular stock in this table. On the other hand Barington/Hilco Acquisition Corp. Common Stock (NASDAQ:BHAC) is the least popular one with only four bullish hedge fund positions. Cyren Ltd (NASDAQ:CYRN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal, and with hedge funds owning 19.10% of its shares, it may be worth looking into this stock further to see why hedge funds like it.