Is PTC Inc (NASDAQ:PMTC) a buy right now? The smart money is becoming less hopeful. The number of long hedge fund bets shrunk by 3 in recent months.
According to most shareholders, hedge funds are assumed to be slow, outdated financial tools of years past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the leaders of this club, about 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total asset base, and by tracking their highest performing picks, we have formulated a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, positive insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are lots of reasons for an insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).
Now, let’s take a glance at the recent action regarding PTC Inc (NASDAQ:PMTC).
What does the smart money think about PTC Inc (NASDAQ:PMTC)?
In preparation for this year, a total of 12 of the hedge funds we track were bullish in this stock, a change of -20% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially.
Of the funds we track, Eric Bannasch’s Cadian Capital had the most valuable position in PTC Inc (NASDAQ:PMTC), worth close to $57 million, comprising 1.9% of its total 13F portfolio. The second largest stake is held by Clint Carlson of Carlson Capital, with a $14.2 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Chuck Royce’s Royce & Associates, Joseph A. Jolson’s Harvest Capital Strategies and Jim Simons’s Renaissance Technologies.
Seeing as PTC Inc (NASDAQ:PMTC) has witnessed a declination in interest from hedge fund managers, logic holds that there was a specific group of funds that slashed their positions entirely last quarter. It’s worth mentioning that Bain Capital’s Brookside Capital said goodbye to the largest stake of all the hedgies we monitor, worth an estimated $50.1 million in stock.. Joseph A. Jolson’s fund, Harvest Capital Strategies, also cut its stock, about $9.8 million worth. These moves are important to note, as total hedge fund interest fell by 3 funds last quarter.
How have insiders been trading PTC Inc (NASDAQ:PMTC)?
Insider buying is most useful when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, PTC Inc (NASDAQ:PMTC) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to PTC Inc (NASDAQ:PMTC). These stocks are Tyler Technologies, Inc. (NYSE:TYL), ACI Worldwide Inc (NASDAQ:ACIW), Mentor Graphics Corp (NASDAQ:MENT), National Instruments Corp (NASDAQ:NATI), and Concur Technologies, Inc. (NASDAQ:CNQR). This group of stocks are the members of the technical & system software industry and their market caps are similar to PMTC’s market cap.