Hedge Funds Are Selling CIBER, Inc. (CBR)

Is it smart to be bullish on CIBER, Inc. (NYSE:CBR)?

In the eyes of many of your fellow readers, hedge funds are perceived as bloated, outdated investment tools of a forgotten age. Although there are In excess of 8,000 hedge funds trading currently, Insider Monkey focuses on the leaders of this club, about 525 funds. It is widely held that this group has its hands on the lion’s share of the smart money’s total capital, and by tracking their highest quality investments, we’ve found a few investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as key, optimistic insider trading sentiment is another way to look at the marketplace. There are lots of stimuli for an executive to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

Now that that’s out of the way, let’s examine the recent info about CIBER, Inc. (NYSE:CBR).

CIBER, Inc. (NYSE:CBR)

How are hedge funds trading CIBER, Inc. (NYSE:CBR)?

Heading into Q3, a total of 10 of the hedge funds we track were long in this stock, a change of -17% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably.

Out of the hedge funds we follow, Chuck Royce’s Royce & Associates had the largest position in CIBER, Inc. (NYSE:CBR), worth close to $8 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $1.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Glenn Russell Dubin’s Highbridge Capital Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.

Judging by the fact that CIBER, Inc. (NYSE:CBR) has faced dropping sentiment from the smart money’s best and brightest, it’s safe to say that there is a sect of funds that slashed their entire stakes at the end of the second quarter. Interestingly, Mike Vranos’s Ellington said goodbye to the largest position of the “upper crust” of funds we monitor, totaling about $0.3 million in stock, and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are interesting, as total hedge fund interest was cut by 2 funds at the end of the second quarter.

Insider trading activity in CIBER, Inc. (NYSE:CBR)

Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time frame, CIBER, Inc. (NYSE:CBR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to CIBER, Inc. (NYSE:CBR). These stocks are 21Vianet Group Inc (NASDAQ:VNET), EPIQ Systems, Inc. (NASDAQ:EPIQ), Greenway Medical Technologies, Inc. (NYSE:GWAY), iSoftStone Holdings Ltd (ADR) (NYSE:ISS), and Computer Task Group, Inc. (NASDAQ:CTGX). This group of stocks are the members of the information technology services industry and their market caps match CBR’s market cap.