Hedge Funds Are Selling Adobe Systems Incorporated (NASDAQ:ADBE)

Adobe Systems Incorporated (NASDAQ:ADBE) was in 35 hedge funds’ portfolio at the end of the fourth quarter of 2012. ADBE investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. There were 36 hedge funds in our database with ADBE positions at the end of the previous quarter.

According to most shareholders, hedge funds are assumed to be slow, old financial tools of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the elite of this group, about 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by watching their top stock picks, we have revealed a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Adobe Systems Incorporated (NASDAQ:ADBE)Just as beneficial, positive insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are many incentives for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this method if shareholders know where to look (learn more here).

Keeping this in mind, we’re going to take a glance at the recent action encompassing Adobe Systems Incorporated (NASDAQ:ADBE).

Hedge fund activity in Adobe Systems Incorporated (NASDAQ:ADBE)

In preparation for this year, a total of 35 of the hedge funds we track held long positions in this stock, a change of -3% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, ValueAct Capital, managed by Jeffrey Ubben, holds the most valuable position in Adobe Systems Incorporated (NASDAQ:ADBE). ValueAct Capital has a $1.18 billion position in the stock, comprising 15% of its 13F portfolio. On ValueAct Capital’s heels is Luxor Capital Group, managed by Christian Leone, which held a $139 million position; 4.9% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Christopher Lord’s Criterion Capital, Glenn Greenberg’s Brave Warrior Capital and D. E. Shaw’s D E Shaw.

Judging by the fact that Adobe Systems Incorporated (NASDAQ:ADBE) has witnessed bearish sentiment from the smart money, it’s easy to see that there were a few funds who sold off their positions entirely heading into 2013. It’s worth mentioning that Michael Platt and William Reeves’s BlueCrest Capital Mgmt. said goodbye to the largest investment of all the hedgies we track, worth close to $13 million in call options, and Glenn J. Krevlin of Glenhill Advisors was right behind this move, as the fund said goodbye to about $11 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds heading into 2013.

What have insiders been doing with Adobe Systems Incorporated (NASDAQ:ADBE)?

Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past 180 days. Over the last half-year time frame, Adobe Systems Incorporated (NASDAQ:ADBE) has seen 1 unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading activity, and Adobe Systems Incorporated (NASDAQ:ADBE) is no exception.

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