Should investors be bullish on Aruba Networks, Inc. (NASDAQ:ARUN)?
In the 21st century investor’s toolkit, there are plenty of methods shareholders can use to analyze publicly traded companies. Some of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can beat the market by a significant margin (see just how much).
Equally as necessary, positive insider trading sentiment is a second way to look at the marketplace. There are a number of stimuli for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).
Thus, we’re going to analyze the recent info surrounding Aruba Networks, Inc. (NASDAQ:ARUN).
What does the smart money think about Aruba Networks, Inc. (NASDAQ:ARUN)?
Heading into Q3, a total of 19 of the hedge funds we track held long positions in this stock, a change of -17% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
When using filings from the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Aruba Networks, Inc. (NASDAQ:ARUN). Citadel Investment Group has a $38.5 million position in the stock, comprising 0.1% of its 13F portfolio. On Citadel Investment Group’s heels is Constantinos J. Christofilis of Archon Capital Management, with a $16.8 million position; 7.6% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Paul Reeder and Edward Shapiro’s PAR Capital Management, Steven Cohen’s SAC Capital Advisors and Jim Simons’s Renaissance Technologies.
Judging by the fact that Aruba Networks, Inc. (NASDAQ:ARUN) has faced bearish sentiment from the top-tier hedge fund industry, it’s easy to see that there was a specific group of money managers that elected to cut their full holdings at the end of the second quarter. It’s worth mentioning that Donald Chiboucis’s Columbus Circle Investors cut the largest investment of the 450+ funds we watch, worth an estimated $95.4 million in stock, and Panayotis æTakisÆ Sparaggis of Alkeon Capital Management was right behind this move, as the fund sold off about $27.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds at the end of the second quarter.
What have insiders been doing with Aruba Networks, Inc. (NASDAQ:ARUN)?
Insider buying made by high-level executives is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest 180-day time frame, Aruba Networks, Inc. (NASDAQ:ARUN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Aruba Networks, Inc. (NASDAQ:ARUN). These stocks are Super Micro Computer, Inc. (NASDAQ:SMCI), Juniper Networks, Inc. (NYSE:JNPR), Finisar Corporation (NASDAQ:FNSR), Palo Alto Networks Inc (NYSE:PANW), and Riverbed Technology, Inc. (NASDAQ:RVBD). This group of stocks are the members of the networking & communication devices industry and their market caps are closest to ARUN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Super Micro Computer, Inc. (NASDAQ:SMCI) | 6 | 0 | 0 |
| Juniper Networks, Inc. (NYSE:JNPR) | 22 | 0 | 0 |
| Finisar Corporation (NASDAQ:FNSR) | 20 | 0 | 0 |
| Palo Alto Networks Inc (NYSE:PANW) | 12 | 0 | 0 |
| Riverbed Technology, Inc. (NASDAQ:RVBD) | 19 | 0 | 0 |
Using the returns demonstrated by the previously mentioned studies, regular investors should always pay attention to hedge fund and insider trading activity, and Aruba Networks, Inc. (NASDAQ:ARUN) is an important part of this process.
