Hedge Funds Are Dumping Equinix Inc (NASDAQ:EQIX)

Is Equinix Inc (NASDAQ:EQIX) a buy, sell, or hold? Investors who are in the know are taking a bearish view. The number of bullish hedge fund positions fell by 5 lately.

In the eyes of most stock holders, hedge funds are viewed as worthless, old financial vehicles of the past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the upper echelon of this group, around 450 funds. It is widely believed that this group has its hands on most of the smart money’s total capital, and by watching their top stock picks, we have identified a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equinix Inc (NASDAQ:EQIX)

Just as beneficial, positive insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are lots of stimuli for an executive to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).

With all of this in mind, let’s take a look at the recent action surrounding Equinix Inc (NASDAQ:EQIX).

What does the smart money think about Equinix Inc (NASDAQ:EQIX)?

At the end of the fourth quarter, a total of 55 of the hedge funds we track were long in this stock, a change of -8% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Philippe Laffont’s Coatue Management had the most valuable position in Equinix Inc (NASDAQ:EQIX), worth close to $859 million billion, comprising 14.1% of its total 13F portfolio. Coming in second is Stephen Mandel of Lone Pine Capital, with a $576 million position; 2% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include John Paulson’s Paulson & Co, Daniel S. Och’s OZ Management and Jeffrey Tannenbaum’s Fir Tree.

Since Equinix Inc (NASDAQ:EQIX) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds who sold off their full holdings heading into 2013. It’s worth mentioning that James Crichton and Adam Weiss’s Scout Capital Management dumped the biggest position of the 450+ funds we track, worth an estimated $97 million in stock., and Louis Navellier of Navellier & Associates was right behind this move, as the fund sold off about $84 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds heading into 2013.

What do corporate executives and insiders think about Equinix Inc (NASDAQ:EQIX)?

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past six months. Over the latest 180-day time period, Equinix Inc (NASDAQ:EQIX) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

With the results shown by the aforementioned research, everyday investors must always watch hedge fund and insider trading sentiment, and Equinix Inc (NASDAQ:EQIX) is an important part of this process.

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