There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Apigee Corp (NASDAQ:APIC).
Apigee Corp (NASDAQ:APIC) has experienced a decrease in enthusiasm from smart money recently. APIC was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with APIC positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cardionet Inc (NASDAQ:BEAT), Global Indemnity plc (NASDAQ:GBLI), and Accuray Incorporated (NASDAQ:ARAY) to gather more data points.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
What have hedge funds been doing with Apigee Corp (NASDAQ:APIC)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in APIC over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Dan Loeb’s Third Point has the largest position in Apigee Corp (NASDAQ:APIC), worth close to $55.1 million. On Third Point’s heels is Robert Emil Zoellner of Alpine Associates, with a $20.2 million position. Some other members of the smart money that are bullish include Millennium Management, one of the 10 largest hedge funds in the world, Chuck Royce’s Royce & Associates and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that Apigee Corp (NASDAQ:APIC) has sustained a decline in interest from hedge fund managers, we can see that there were a few money managers that elected to cut their full holdings last quarter. It’s worth mentioning that George McCabe’s Portolan Capital Management cashed in the largest stake of all the hedgies studied by Insider Monkey, worth close to $7.8 million in stock. Brian Ashford-Russell and Tim Woolley’s fund, Polar Capital, also said goodbye to its stock, about $0.6 million worth.
Let’s now review hedge fund activity in other stocks similar to Apigee Corp (NASDAQ:APIC). We will take a look at Cardionet Inc (NASDAQ:BEAT), Global Indemnity plc (NASDAQ:GBLI), Accuray Incorporated (NASDAQ:ARAY), and The First of Long Island Corporation (NASDAQ:FLIC). All of these stocks’ market caps resemble APIC’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $99 million in APIC’s case. Cardionet Inc (NASDAQ:BEAT) is the most popular stock in this table. On the other hand Global Indemnity plc (NASDAQ:GBLI) is the least popular one with only 5 bullish hedge fund positions. Apigee Corp (NASDAQ:APIC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BEAT might be a better candidate to consider taking a long position in.