If you’d ask most market participants, hedge funds are viewed as worthless, outdated investment tools of years past. While there are over 8000 funds with their doors open at present, we hone in on the elite of this club, about 450 funds. Most estimates calculate that this group has its hands on most of the hedge fund industry’s total asset base, and by watching their top equity investments, we have discovered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, bullish insider trading sentiment is another way to parse down the investments you’re interested in. There are a number of reasons for a bullish insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).
Now, let’s take a look at the latest action regarding Dot Hill Systems Corp. (NASDAQ:HILL).
How have hedgies been trading Dot Hill Systems Corp. (NASDAQ:HILL)?
In preparation for this quarter, a total of 4 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter.
Due to the fact that Dot Hill Systems Corp. (NASDAQ:HILL) has faced a declination in interest from the aggregate hedge fund industry, we can see that there is a sect of money managers who sold off their positions entirely at the end of the first quarter. At the top of the heap, Cliff Asness’s AQR Capital Management dumped the biggest stake of the 450+ funds we key on, comprising an estimated $0 million in stock. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Dot Hill Systems Corp. (NASDAQ:HILL)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the latest six-month time period, Dot Hill Systems Corp. (NASDAQ:HILL) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Dot Hill Systems Corp. (NASDAQ:HILL). These stocks are STEC, Inc. (NASDAQ:STEC), Imation Corp. (NYSE:IMN), OCZ Technology Group Inc. (NASDAQ:OCZ), Overland Storage, Inc. (NASDAQ:OVRL), and Hutchinson Technology Incorporated (NASDAQ:HTCH). This group of stocks are the members of the data storage devices industry and their market caps are similar to HILL’s market cap.