Here is What Hedge Funds Think About Xerox Corporation (XRX)

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Xerox Corporation (NYSE:XRX) has seen an increase in enthusiasm from smart money lately.

According to most shareholders, hedge funds are viewed as unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open today, we choose to focus on the leaders of this group, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total asset base, and by paying attention to their highest performing picks, we have deciphered a few investment strategies that have historically beaten the broader indices. 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Xerox Corporation (NYSE:XRX)Just as important, bullish insider trading activity is a second way to break down the investments you’re interested in. As the old adage goes: there are a variety of reasons for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand where to look (learn more here).

Now, it’s important to take a glance at the recent action regarding Xerox Corporation (NYSE:XRX).

What does the smart money think about Xerox Corporation (NYSE:XRX)?

At Q1’s end, a total of 39 of the hedge funds we track were long in this stock, a change of 3% from the first quarter.

As aggregate interest increased, some big names were breaking ground themselves. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, assembled the largest position in Xerox Corporation (NYSE:XRX). First Pacific Advisors LLC had 83.1 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also initiated a $28.3 million position during the quarter. The following funds were also among the new XRX investors: James Dondero’s Highland Capital Management, Douglas W. Case’s Advanced Investment Partners, and Louis Bacon’s Moore Global Investments.

Insider trading activity in Xerox Corporation (NYSE:XRX)

Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time period, Xerox Corporation (NYSE:XRX) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Xerox Corporation (NYSE:XRX). These stocks are Wipro Limited (ADR) (NYSE:WIT), ServiceNow Inc (NYSE:NOW), Gartner Inc (NYSE:IT), Rackspace Hosting, Inc. (NYSE:RAX), and Computer Sciences Corporation (NYSE:CSC). This group of stocks belong to the information technology services industry and their market caps are closest to XRX’s market cap.

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