Informatica Corporation (INFA): Are Hedge Funds Right About This Stock?

To many traders, hedge funds are seen as overrated, outdated financial tools of an era lost to time. Although there are over 8,000 hedge funds trading currently, Insider Monkey focuses on the crème de la crème of this group, about 525 funds. It is widely held that this group has its hands on the majority of all hedge funds’ total capital, and by paying attention to their highest quality stock picks, we’ve figured out a few investment strategies that have historically outstripped the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as useful, optimistic insider trading activity is a second way to look at the investments you’re interested in. There are lots of stimuli for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand what to do (learn more here).

Thus, let’s examine the latest info for Informatica Corporation (NASDAQ:INFA).

What have hedge funds been doing with Informatica Corporation (NASDAQ:INFA)?

Heading into Q3, a total of 30 of the hedge funds we track were long in this stock, a change of 11% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.

Informatica Corporation (NASDAQ:INFA)Out of the hedge funds we follow, Cadian Capital, managed by Eric Bannasch, holds the largest position in Informatica Corporation (NASDAQ:INFA). Cadian Capital has a $97.6 million position in the stock, comprising 3% of its 13F portfolio. On Cadian Capital’s heels is Matt Sirovich and Jeremy Mindich of Scopia Capital, with a $95.6 million position; 2.7% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include John Lykouretzos’s Hoplite Capital Management, Panayotis Sparaggis’s Alkeon Capital Management and Christopher Medlock James’s Partner Fund Management.

As aggregate interest spiked, particular hedge funds have jumped into Informatica Corporation (NASDAQ:INFA) headfirst. Cadian Capital, managed by Eric Bannasch, established the most valuable position in Informatica Corporation (NASDAQ:INFA). Cadian Capital had 97.6 million invested in the company at the end of the quarter. Matt Sirovich and Jeremy Mindich’s Scopia Capital also initiated a $95.6 million position during the quarter. The other funds with new positions in the stock are John Lykouretzos’s Hoplite Capital Management, Panayotis Sparaggis’s Alkeon Capital Management, and Christopher Medlock James’s Partner Fund Management.

What do corporate executives and insiders think about Informatica Corporation (NASDAQ:INFA)?

Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, Informatica Corporation (NASDAQ:INFA) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Informatica Corporation (NASDAQ:INFA). These stocks are Total System Services, Inc. (NYSE:TSS), Aspen Technology, Inc. (NASDAQ:AZPN), Tibco Software Inc. (NASDAQ:TIBX), Solera Holdings Inc (NYSE:SLH), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). All of these stocks are in the business software & services industry and their market caps match INFA’s market cap.