Do Hedge Funds and Insiders Love UTStarcom Holdings Corp (UTSI)?

Is UTStarcom Holdings Corp (NASDAQ:UTSI) a sound investment now? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund bets dropped by 1 lately.

In today’s marketplace, there are plenty of metrics shareholders can use to monitor their holdings. A pair of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass the broader indices by a very impressive amount (see just how much).

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

Keeping this in mind, we’re going to take a glance at the recent action regarding UTStarcom Holdings Corp (NASDAQ:UTSI).

What have hedge funds been doing with UTStarcom Holdings Corp (NASDAQ:UTSI)?

In preparation for this quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -11% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably.

UTStarcom Holdings Corp (NASDAQ:UTSI)According to our comprehensive database, Shah Capital Management, managed by Himanshu H. Shah, holds the largest position in UTStarcom Holdings Corp (NASDAQ:UTSI). Shah Capital Management has a $20.3 million position in the stock, comprising 22.8% of its 13F portfolio. The second largest stake is held by Prescott Group Capital Management, managed by Phil Frohlich, which held a $6.2 million position; 1.4% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Stuart Peterson’s Artis Capital Management.

Seeing as UTStarcom Holdings Corp (NASDAQ:UTSI) has witnessed falling interest from the smart money, we can see that there exists a select few hedgies that decided to sell off their entire stakes heading into Q2. Intriguingly, Phil Frohlich’s Prescott Group Capital Management sold off the largest investment of the “upper crust” of funds we monitor, worth about $6.3 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dumped its stock, about $0.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds heading into Q2.

Insider trading activity in UTStarcom Holdings Corp (NASDAQ:UTSI)

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, UTStarcom Holdings Corp (NASDAQ:UTSI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to UTStarcom Holdings Corp (NASDAQ:UTSI). These stocks are NTELOS Holdings Corp. (NASDAQ:NTLS), Maxcom Telecomunic S.A.B. de C.V. (ADR) (NYSE:MXT), USA Mobility Inc (NASDAQ:USMO), Leap Wireless International, Inc. (NASDAQ:LEAP), and Pendrell Corporation – Class A (NASDAQ:PCO). All of these stocks are in the wireless communications industry and their market caps match UTSI’s market cap.