What’s a smart Lionbridge Technologies, Inc. (NASDAQ:LIOX) investor to do?
To many market players, hedge funds are perceived as useless, old financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds in operation in present day, Insider Monkey focuses on the crème de la crème of this club, around 525 funds. It is assumed that this group oversees most of all hedge funds’ total assets, and by paying attention to their highest performing investments, we’ve uncovered a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as key, positive insider trading activity is a second way to analyze the marketplace. Just as you’d expect, there are lots of reasons for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).
What’s more, let’s examine the recent info about Lionbridge Technologies, Inc. (NASDAQ:LIOX).
How are hedge funds trading Lionbridge Technologies, Inc. (NASDAQ:LIOX)?
At Q2’s end, a total of 8 of the hedge funds we track were long in this stock, a change of -27% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes substantially.
Out of the hedge funds we follow, Glenn J. Krevlin’s Glenhill Advisors had the largest position in Lionbridge Technologies, Inc. (NASDAQ:LIOX), worth close to $24.9 million, comprising 2.8% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.
Since Lionbridge Technologies, Inc. (NASDAQ:LIOX) has witnessed declining interest from the top-tier hedge fund industry, it’s easy to see that there was a specific group of funds who were dropping their full holdings at the end of the second quarter. Interestingly, Robert B. Gillam’s McKinley Capital Management sold off the largest position of the 450+ funds we monitor, comprising an estimated $1.4 million in stock, and Peter Algert and Kevin Coldiron of Algert Coldiron Investors was right behind this move, as the fund sold off about $0.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds at the end of the second quarter.
What have insiders been doing with Lionbridge Technologies, Inc. (NASDAQ:LIOX)?
Legal insider trading, particularly when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, Lionbridge Technologies, Inc. (NASDAQ:LIOX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Lionbridge Technologies, Inc. (NASDAQ:LIOX). These stocks are PRGX Global Inc (NASDAQ:PRGX), Limelight Networks, Inc. (NASDAQ:LLNW), Swisher Hygiene, Inc. (NASDAQ:SWSH), Carbonite Inc (NASDAQ:CARB), and PowerSecure International, Inc. (NASDAQ:POWR). This group of stocks are in the business services industry and their market caps resemble LIOX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|PRGX Global Inc (NASDAQ:PRGX)||8||0||0|
|Limelight Networks, Inc. (NASDAQ:LLNW)||9||0||0|
|Swisher Hygiene, Inc. (NASDAQ:SWSH)||5||0||0|
|Carbonite Inc (NASDAQ:CARB)||6||0||0|
|PowerSecure International, Inc. (NASDAQ:POWR)||14||0||0|
Using the results demonstrated by our strategies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and Lionbridge Technologies, Inc. (NASDAQ:LIOX) shareholders fit into this picture quite nicely.