Now, according to many of your fellow readers, hedge funds are viewed as delayed, outdated investment tools of an era lost to time. Although there are more than 8,000 hedge funds with their doors open currently, this site focuses on the top tier of this club, close to 525 funds. Analysts calculate that this group oversees the lion’s share of the hedge fund industry’s total capital, and by watching their highest performing picks, we’ve found a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as necessary, optimistic insider trading sentiment is a second way to analyze the investments you’re interested in. There are lots of motivations for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).
What’s more, let’s analyze the latest info surrounding Digital Generation Inc (NASDAQ:DGIT).
How are hedge funds trading Digital Generation Inc (NASDAQ:DGIT)?
At the end of the second quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -15% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes considerably.
When using filings from the hedgies we track, Roumell Asset Management, managed by Jim Roumell, holds the biggest position in Digital Generation Inc (NASDAQ:DGIT). Roumell Asset Management has a $10.1 million position in the stock, comprising 6.9% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $3.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Matthew Hulsizer’s PEAK6 Capital Management, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Judging by the fact that Digital Generation Inc (NASDAQ:DGIT) has experienced dropping sentiment from the top-tier hedge fund industry, it’s easy to see that there lies a certain “tier” of funds that decided to sell off their positions entirely at the end of the second quarter. Intriguingly, David Moradi’s Anthion Management cut the biggest investment of the 450+ funds we key on, valued at close to $8.2 million in stock. Brett Hendrickson’s fund, Nokomis Capital, also dumped its stock, about $4.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds at the end of the second quarter.
What do corporate executives and insiders think about Digital Generation Inc (NASDAQ:DGIT)?
Insider buying made by high-level executives is at its handiest when the company in focus has seen transactions within the past half-year. Over the latest six-month time period, Digital Generation Inc (NASDAQ:DGIT) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Digital Generation Inc (NASDAQ:DGIT). These stocks are Swisher Hygiene, Inc. (NASDAQ:SWSH), Limelight Networks, Inc. (NASDAQ:LLNW), Acquity Group Ltd (NYSEAMEX:AQ), PRGX Global Inc (NASDAQ:PRGX), and Reis Inc (NASDAQ:REIS). All of these stocks are in the business services industry and their market caps are similar to DGIT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Swisher Hygiene, Inc. (NASDAQ:SWSH) | 5 | 0 | 0 |
| Limelight Networks, Inc. (NASDAQ:LLNW) | 9 | 0 | 0 |
| Acquity Group Ltd (NYSEAMEX:AQ) | 5 | 0 | 0 |
| PRGX Global Inc (NASDAQ:PRGX) | 8 | 0 | 0 |
| Reis Inc (NASDAQ:REIS) | 4 | 0 | 0 |
Using the returns demonstrated by the previously mentioned tactics, average investors must always pay attention to hedge fund and insider trading activity, and Digital Generation Inc (NASDAQ:DGIT) shareholders fit into this picture quite nicely.
