Is Fusion-IO, Inc. (FIO) Going to Burn These Hedge Funds?

Page 1 of 2

Fusion-IO, Inc. (NYSE:FIO) investors: listen up.

If you were to ask many of your fellow readers, hedge funds are seen as bloated, outdated investment vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open in present day, this site focuses on the moguls of this club, close to 525 funds. It is assumed that this group controls the lion’s share of the smart money’s total assets, and by keeping an eye on their highest quality equity investments, we’ve determined a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).


Equally as key, bullish insider trading activity is a second way to analyze the financial markets. There are a number of reasons for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).

Furthermore, it’s important to examine the latest info for Fusion-IO, Inc. (NYSE:FIO).

Hedge fund activity in Fusion-IO, Inc. (NYSE:FIO)

At Q2’s end, a total of 21 of the hedge funds we track held long positions in this stock, a change of 24% from the first quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their stakes meaningfully.

When using filings from the hedgies we track, David Tepper’s Appaloosa Management LP had the most valuable position in Fusion-IO, Inc. (NYSE:FIO), worth close to $22.5 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Southpoint Capital Advisors, managed by Rob Butts and Josh Clark, which held a $21.9 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Joseph A. Jolson’s Harvest Capital Strategies, Matthew Knauer and Mina Faltas’s Nokota Management and Philippe Laffont’s Coatue Management.

With a general bullishness amongst the titans, certain bigger names were leading the bulls’ herd. Appaloosa Management LP, managed by David Tepper, initiated the most outsized position in Fusion-IO, Inc. (NYSE:FIO). Appaloosa Management LP had 22.5 million invested in the company at the end of the quarter. Rob Butts and Josh Clark’s Southpoint Capital Advisors also made a $21.9 million investment in the stock during the quarter. The following funds were also among the new FIO investors: Joseph A. Jolson’s Harvest Capital Strategies, Matthew Knauer and Mina Faltas’s Nokota Management, and Philippe Laffont’s Coatue Management.

What have insiders been doing with Fusion-IO, Inc. (NYSE:FIO)?

Insider buying made by high-level executives is particularly usable when the company in question has experienced transactions within the past six months. Over the last six-month time period, Fusion-IO, Inc. (NYSE:FIO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Fusion-IO, Inc. (NYSE:FIO). These stocks are Datalink Corporation (NASDAQ:DTLK), Xyratex Ltd. (NASDAQ:XRTX), Quantum Corp (NYSE:QTM), Emulex Corporation (NYSE:ELX), and Brocade Communications Systems, Inc. (NASDAQ:BRCD). This group of stocks are in the data storage devices industry and their market caps match FIO’s market cap.

Page 1 of 2