Is It A Good Opportunity To Buy Allot Communications Ltd. (ALLT) As It Plunges On Second Quarter Guidance Cut?

What have hedge funds been doing with Allot Communications Ltd. (NASDAQ:ALLT)?

When looking at the hedgies followed by Insider Monkey, Mark N. Diker’s Diker Management had the most valuable position in Allot Communications Ltd. (NASDAQ:ALLT), with ownership of 1.5 million shares worth close to $12.9 million at the end of the first trimester, amounting to 2.3% of its total 13F portfolio. The second-largest stake was held by Anand Parekh of Alyeska Investment Group, with around 1.3 million shares valued at $11.5 million; the fund had 0.2% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise Brian Ashford-Russell and Tim Woolley’s Polar Capital, Peter A. Wright’s P.A.W. Capital Partners, and Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital.

Because Allot Communications Ltd. (NASDAQ:ALLT) has faced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few hedge fund managers who decided to sell off their entire stake in the stock during the first three months of the year. Intriguingly, Eric Bannasch‘s Cadian Capital cut the largest investment in the stock during the first quarter by selling around 1.4 million shares of the company. Even the aforementioned hedge fund manager, Mark N. Diker, who holds the largest long position in the stock at the end of March, had his position of call options closed.

Hedge funds were rightfully bearish on Allot Communications Ltd. (NASDAQ:ALLT) as the company has struggled mightily since the end of the first quarter. With a severe cut to the company’s guidance for the second quarter, we don’t see the bottom being reached for this stock yet and don’t recommend buying it at the moment.

Disclosure: None