Is Proofpoint Inc (PFPT) Going to Burn These Hedge Funds?

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Proofpoint Inc (NASDAQ:PFPT) investors should be aware of an increase in enthusiasm from smart money in recent months.

Proofpoint Inc (NASDAQ:PFPT)

At the moment, there are many indicators shareholders can use to watch publicly traded companies. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outclass the market by a significant margin (see just how much).

Just as beneficial, positive insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are a number of incentives for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if shareholders know where to look (learn more here).

With these “truths” under our belt, let’s take a gander at the recent action encompassing Proofpoint Inc (NASDAQ:PFPT).

How are hedge funds trading Proofpoint Inc (NASDAQ:PFPT)?

Heading into Q2, a total of 9 of the hedge funds we track held long positions in this stock, a change of 50% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, Brian Ashford-Russell and Tim Woolley’s Polar Capital had the most valuable position in Proofpoint Inc (NASDAQ:PFPT), worth close to $8.8 million, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Invicta Capital Management, managed by Gregory A. Weaver, which held a $4.8 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Charles Clough’s Clough Capital Partners, John Murphy’s Alydar Capital and Donald Chiboucis’s Columbus Circle Investors.

As industrywide interest jumped, key money managers have jumped into Proofpoint Inc (NASDAQ:PFPT) headfirst. Invicta Capital Management, managed by Gregory A. Weaver, initiated the most valuable position in Proofpoint Inc (NASDAQ:PFPT). Invicta Capital Management had 4.8 million invested in the company at the end of the quarter. John Murphy’s Alydar Capital also made a $2.9 million investment in the stock during the quarter. The following funds were also among the new PFPT investors: Donald Chiboucis’s Columbus Circle Investors and John Overdeck and David Siegel’s Two Sigma Advisors.

How are insiders trading Proofpoint Inc (NASDAQ:PFPT)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, Proofpoint Inc (NASDAQ:PFPT) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Proofpoint Inc (NASDAQ:PFPT). These stocks are E2open Inc (NASDAQ:EOPN), AutoNavi Holdings Ltd (ADR) (NASDAQ:AMAP), Bazaarvoice Inc (NASDAQ:BV), SciQuest, Inc. (NASDAQ:SQI), and Accelrys, Inc. (NASDAQ:ACCL). This group of stocks belong to the application software industry and their market caps are closest to PFPT’s market cap.

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