Sycamore Networks, Inc. (NASDAQ:SCMR) was in 13 hedge funds’ portfolio at the end of December. SCMR investors should be aware of a decrease in hedge fund interest of late. There were 14 hedge funds in our database with SCMR positions at the end of the previous quarter.
To the average investor, there are plenty of indicators market participants can use to analyze publicly traded companies. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can outperform the S&P 500 by a superb margin (see just how much).
Equally as beneficial, positive insider trading sentiment is another way to break down the financial markets. There are many reasons for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).
Consequently, let’s take a gander at the recent action encompassing Sycamore Networks, Inc. (NASDAQ:SCMR).
What have hedge funds been doing with Sycamore Networks, Inc. (NASDAQ:SCMR)?
At the end of the fourth quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of -7% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Martin Whitman’s Third Avenue Management had the largest position in Sycamore Networks, Inc. (NASDAQ:SCMR), worth close to $9 million, comprising 0.2% of its total 13F portfolio. Coming in second is Hudson Bay Capital Management, managed by Sander Gerber, which held a $3 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Thomas Steyer’s Farallon Capital, Andrew Weiss’s Weiss Asset Management and Mario Gabelli’s GAMCO Investors.
Judging by the fact that Sycamore Networks, Inc. (NASDAQ:SCMR) has witnessed declining sentiment from the smart money, it’s safe to say that there is a sect of hedgies that slashed their full holdings in Q4. It’s worth mentioning that Seth Klarman’s Baupost Group cut the biggest stake of the 450+ funds we monitor, totaling about $8 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $1 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds in Q4.
Insider trading activity in Sycamore Networks, Inc. (NASDAQ:SCMR)
Insider purchases made by high-level executives is best served when the company in question has experienced transactions within the past half-year. Over the last half-year time frame, Sycamore Networks, Inc. (NASDAQ:SCMR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Sycamore Networks, Inc. (NASDAQ:SCMR). These stocks are Echelon Corporation (NASDAQ:ELON), Digital Angel Corporation (PINK:DIGA), Lantronix Inc (NASDAQ:LTRX), Crossroads Systems, Inc. (NASDAQ:CRDS), and Performance Technologies (NASDAQ:PTIX). All of these stocks are in the networking & communication devices industry and their market caps are similar to SCMR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Echelon Corporation (NASDAQ:ELON)||5||1||1|
|Digital Angel Corporation (PINK:DIGA)||0||0|
|Lantronix Inc (NASDAQ:LTRX)||2||4||0|
|Crossroads Systems, Inc. (NASDAQ:CRDS)||1||0||0|
|Performance Technologies (NASDAQ:PTIX)||1||0||0|
With the returns shown by Insider Monkey’s time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Sycamore Networks, Inc. (NASDAQ:SCMR) shareholders fit into this picture quite nicely.