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Hedge Funds Are Crazy About Calix Inc (CALX) – CalAmp Corp. (CAMP), Allot Communications Ltd. (ALLT)

Calix Inc (NYSE:CALX) was in 12 hedge funds’ portfolio at the end of December. CALX investors should be aware of an increase in activity from the world’s largest hedge funds recently. There were 11 hedge funds in our database with CALX holdings at the end of the previous quarter.

According to most traders, hedge funds are assumed to be worthless, old financial vehicles of the past. While there are more than 8000 funds in operation today, we choose to focus on the elite of this club, close to 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total capital, and by keeping an eye on their top equity investments, we have formulated a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 24 percentage points in 7 months (see the details here).

Just as important, positive insider trading sentiment is another way to break down the financial markets. There are a variety of motivations for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).

With these “truths” under our belt, let’s take a glance at the key action encompassing Calix Inc (NYSE:CALX).

What does the smart money think about Calix Inc (NYSE:CALX)?

In preparation for this year, a total of 12 of the hedge funds we track held long positions in this stock, a change of 9% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings considerably.

Of the funds we track, Invicta Capital Management, managed by Gregory A. Weaver, holds the largest position in Calix Inc (NYSE:CALX). Invicta Capital Management has a $11.2 million position in the stock, comprising 5% of its 13F portfolio. On Invicta Capital Management’s heels is P.A.W. CAPITAL PARTNERS, managed by Peter A. Wright, which held a $7.7 million position; the fund has 6% of its 13F portfolio invested in the stock. Other peers that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Ken Grossman and Glen Schneider’s SG Capital Management.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Kingdon Capital, managed by Mark Kingdon, assembled the most outsized position in Calix Inc (NYSE:CALX). Kingdon Capital had 1.7 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.4 million position during the quarter. The only other fund with a brand new CALX position is Jeffrey Vinik’s Vinik Asset Management.

How have insiders been trading Calix Inc (NYSE:CALX)?

Bullish insider trading is best served when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, Calix Inc (NYSE:CALX) has seen 1 unique insiders purchasing, and 1 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 Calix Inc (NYSE:CALX). These stocks are 8×8, Inc. (NASDAQ:EGHT), Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), CalAmp Corp. (NASDAQ:CAMP), Allot Communications Ltd. (NASDAQ:ALLT), and Comtech Telecomm. Corp. (NASDAQ:CMTL). This group of stocks belong to the communication equipment industry and their market caps are closest to CALX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
8×8, Inc. (NASDAQ:EGHT) 7 0 2
Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) 8 0 0
CalAmp Corp. (NASDAQ:CAMP) 14 0 5
Allot Communications Ltd. (NASDAQ:ALLT) 10 0 0
Comtech Telecomm. Corp. (NASDAQ:CMTL) 11 0 1

With the results demonstrated by Insider Monkey’s research, retail investors should always keep an eye on hedge fund and insider trading activity, and Calix Inc (NYSE:CALX) applies perfectly to this mantra.

Click here to learn why you should track hedge funds

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