Do Hedge Funds and Insiders Love Imation Corp. (IMN)?

Is Imation Corp. (NYSE:IMN) a good investment?

In the 21st century investor’s toolkit, there are many gauges market participants can use to monitor their holdings. A duo of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outclass the broader indices by a healthy margin (see just how much).

Equally as useful, optimistic insider trading activity is a second way to look at the world of equities. Obviously, there are plenty of incentives for an executive to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

What’s more, let’s examine the latest info for Imation Corp. (NYSE:IMN).

Imation Corp. (NYSE:IMN)

What does the smart money think about Imation Corp. (NYSE:IMN)?

In preparation for the third quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of 22% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially.

When using filings from the hedgies we track, Ariel Investments, managed by John W. Rogers, holds the biggest position in Imation Corp. (NYSE:IMN). Ariel Investments has a $15.6 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Gregg J. Powers of Private Capital Management, with a $8.9 million position; 0.8% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, particular hedge funds have jumped into Imation Corp. (NYSE:IMN) headfirst. Ariel Investments, managed by John W. Rogers, assembled the most outsized position in Imation Corp. (NYSE:IMN). Ariel Investments had 15.6 million invested in the company at the end of the quarter. Gregg J. Powers’s Private Capital Management also initiated a $8.9 million position during the quarter. The following funds were also among the new IMN investors: Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw, and John Overdeck and David Siegel’s Two Sigma Advisors.

What do corporate executives and insiders think about Imation Corp. (NYSE:IMN)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the company in question has seen transactions within the past six months. Over the last six-month time frame, Imation Corp. (NYSE:IMN) has seen 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 Imation Corp. (NYSE:IMN). These stocks are Quantum Corp (NYSE:QTM), Xyratex Ltd. (NASDAQ:XRTX), Datalink Corporation (NASDAQ:DTLK), STEC, Inc. (NASDAQ:STEC), and OCZ Technology Group Inc. (NASDAQ:OCZ). This group of stocks are in the data storage devices industry and their market caps match IMN’s market cap.