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Hedge Funds Aren’t Crazy About Incontact Inc (SAAS) Anymore

Incontact Inc (NASDAQ:SAAS) was in 6 hedge funds’ portfolio at the end of the fourth quarter of 2012. SAAS shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 9 hedge funds in our database with SAAS holdings at the end of the previous quarter.

David Shaw

To the average investor, there are many gauges investors can use to monitor publicly traded companies. A duo of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outperform their index-focused peers by a solid margin (see just how much).

Just as important, optimistic insider trading activity is another way to parse down the financial markets. Obviously, there are many stimuli for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).

Now, it’s important to take a peek at the key action encompassing Incontact Inc (NASDAQ:SAAS).

How have hedgies been trading Incontact Inc (NASDAQ:SAAS)?

At the end of the fourth quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of -33% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Richard Driehaus’s Driehaus Capital had the largest position in Incontact Inc (NASDAQ:SAAS), worth close to $1.9 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which held a $0.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Brian Taylor’s Pine River Capital Management, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.

Since Incontact Inc (NASDAQ:SAAS) has witnessed declining sentiment from the smart money, logic holds that there were a few money managers that slashed their entire stakes at the end of the year. At the top of the heap, Donald Chiboucis’s Columbus Circle Investors said goodbye to the largest position of the 450+ funds we key on, worth close to $3.9 million in stock.. Jeffrey Vinik’s fund, Vinik Asset Management, also dumped its stock, about $1 million worth. These moves are interesting, as aggregate hedge fund interest fell by 3 funds at the end of the year.

What do corporate executives and insiders think about Incontact Inc (NASDAQ:SAAS)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past 180 days. Over the last six-month time frame, Incontact Inc (NASDAQ:SAAS) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Incontact Inc (NASDAQ:SAAS). These stocks are SeaChange International (NASDAQ:SEAC), LogMeIn Inc (NASDAQ:LOGM), Qualys Inc (NASDAQ:QLYS), Responsys Inc (NASDAQ:MKTG), and NQ Mobile Inc (ADR) (NYSE:NQ). This group of stocks are the members of the application software industry and their market caps resemble SAAS’s market cap.