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Is F5 Networks, Inc. (NASDAQ:FFIV) Going to Burn These Hedge Funds?

Is F5 Networks, Inc. (NASDAQ:FFIV) a buy, sell, or hold? Money managers are getting less bullish. The number of long hedge fund bets retreated by 1 lately. Just an hour or so ago, F5 Networks was downgraded by Topeka Capital and William Blair, so it’s worth noting that the smart money may agree.

To the average investor, there are a multitude of metrics shareholders can use to track their holdings. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can trounce the market by a superb margin (see just how much).

Just as beneficial, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. There are many stimuli for an executive to cut shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if investors know where to look (learn more here).

Now, it’s important to take a gander at the key action encompassing F5 Networks, Inc. (NASDAQ:FFIV).

How are hedge funds trading F5 Networks, Inc. (NASDAQ:FFIV)?

In preparation for this year, a total of 23 of the hedge funds we track held long positions in this stock, a change of -4% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Lee Ainslie’s Maverick Capital had the biggest position in F5 Networks, Inc. (NASDAQ:FFIV), worth close to $84 million, comprising 1.2% of its total 13F portfolio. The second largest stake is held by Eric Bannasch of Cadian Capital, with a $54 million position; the fund has 1.7% of its 13F portfolio invested in the stock. RENAISSANCE TECHNOLOGIESRemaining peers with similar optimism include Ryan Frick and Oliver Evans’s Dorsal Capital Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

Because F5 Networks, Inc. (NASDAQ:FFIV) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers who sold off their positions entirely at the end of the year. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors sold off the largest stake of the “upper crust” of funds we watch, worth about $6 million in stock., and George Soros of Soros Fund Management was right behind this move, as the fund said goodbye to about $5 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds at the end of the year.

What do corporate executives and insiders think about F5 Networks, Inc. (NASDAQ:FFIV)?

Bullish insider trading is most useful when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, F5 Networks, Inc. (NASDAQ:FFIV) has seen zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to F5 Networks, Inc. (NASDAQ:FFIV). These stocks are Catamaran Corp (USA) (NASDAQ:CTRX), Workday Inc (NYSE:WDAY), Red Hat, Inc. (NYSE:RHT), Nuance Communications Inc. (NASDAQ:NUAN), and BMC Software, Inc. (NASDAQ:BMC). This group of stocks are in the application software industry and their market caps are similar to FFIV’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Catamaran Corp (USA) (NASDAQ:CTRX) 20 0 0
Workday Inc (NYSE:WDAY) 20 0 0
Red Hat, Inc. (NYSE:RHT) 25 0 6
Nuance Communications Inc. (NASDAQ:NUAN) 17 0 6
BMC Software, Inc. (NASDAQ:BMC) 19 0 9

With the results shown by Insider Monkey’s research, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and F5 Networks, Inc. (NASDAQ:FFIV) is no exception.

Click here to learn why you should track hedge funds