Radware Ltd. (NASDAQ:RDWR) has experienced a decrease in hedge fund interest of late.
According to most traders, hedge funds are assumed to be slow, old investment vehicles of years past. While there are more than 8000 funds in operation today, we hone in on the masters of this group, around 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their best investments, we have identified a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced 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 23.3 percentage points in 8 months (see all of our picks from August).
Equally as beneficial, bullish insider trading activity is another way to break down the stock market universe. As the old adage goes: there are lots of stimuli for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if investors understand where to look (learn more here).
Keeping this in mind, we’re going to take a glance at the key action regarding Radware Ltd. (NASDAQ:RDWR).
What have hedge funds been doing with Radware Ltd. (NASDAQ:RDWR)?
At Q1’s end, a total of 12 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly.
Of the funds we track, Eric Bannasch’s Cadian Capital had the most valuable position in Radware Ltd. (NASDAQ:RDWR), worth close to $71.3 million, comprising 2% of its total 13F portfolio. On Cadian Capital’s heels is James Dinan of York Capital Management, with a $36.9 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include D. E. Shaw’s D E Shaw, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Mark Kingdon’s Kingdon Capital.
Because Radware Ltd. (NASDAQ:RDWR) has experienced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds that slashed their entire stakes in Q1. Interestingly, Steven Cohen’s SAC Capital Advisors said goodbye to the largest stake of the 450+ funds we watch, comprising about $15 million in stock., and D. E. Shaw of D E Shaw was right behind this move, as the fund sold off about $1.7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Radware Ltd. (NASDAQ:RDWR)?
Insider buying is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest half-year time frame, Radware Ltd. (NASDAQ:RDWR) has seen 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 Radware Ltd. (NASDAQ:RDWR). These stocks are iGATE Corporation (NASDAQ:IGTE), EPAM Systems Inc (NYSE:EPAM), Unisys Corporation (NYSE:UIS), Virtusa Corporation (NASDAQ:VRTU), and Sykes Enterprises, Incorporated (NASDAQ:SYKE). All of these stocks are in the information technology services industry and their market caps resemble RDWR’s market cap.