Is Ubiquiti Networks Inc (UBNT) Going to Burn These Hedge Funds?

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Ubiquiti Networks Inc (NASDAQ:UBNT) was in 8 hedge funds’ portfolio at the end of March. UBNT investors should be aware of an increase in support from the world’s most elite money managers of late. There were 7 hedge funds in our database with UBNT positions at the end of the previous quarter.

To most investors, hedge funds are viewed as underperforming, outdated investment tools of years past. While there are greater than 8000 funds trading at present, we look at the top tier of this club, close to 450 funds. It is widely believed that this group controls the majority of all hedge funds’ total capital, and by paying attention to their best investments, we have come up with a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

David Shaw

Equally as key, bullish insider trading activity is a second way to parse down the world of equities. There are lots of motivations for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).

Keeping this in mind, let’s take a gander at the key action surrounding Ubiquiti Networks Inc (NASDAQ:UBNT).

What does the smart money think about Ubiquiti Networks Inc (NASDAQ:UBNT)?

Heading into Q2, a total of 8 of the hedge funds we track held long positions in this stock, a change of 14% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, Stadium Capital Management, managed by Alexander Medina Seaver, holds the largest position in Ubiquiti Networks Inc (NASDAQ:UBNT). Stadium Capital Management has a $10 million position in the stock, comprising 2.2% of its 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $2.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions include Joel Greenblatt’s Gotham Asset Management, Jim Simons’s Renaissance Technologies and Jason F. Harris’s Kendall Square Capital.

With a general bullishness amongst the heavyweights, specific money managers have jumped into Ubiquiti Networks Inc (NASDAQ:UBNT) headfirst. Renaissance Technologies, managed by Jim Simons, initiated the most outsized position in Ubiquiti Networks Inc (NASDAQ:UBNT). Renaissance Technologies had 0.8 million invested in the company at the end of the quarter.

Insider trading activity in Ubiquiti Networks Inc (NASDAQ:UBNT)

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time period, Ubiquiti Networks Inc (NASDAQ:UBNT) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Ubiquiti Networks Inc (NASDAQ:UBNT). These stocks are Telephone & Data Systems, Inc. (NYSE:TDS), InterDigital, Inc. (NASDAQ:IDCC), NII Holdings, Inc. (NASDAQ:NIHD), Cellcom Israel Ltd. (NYSE:CEL), and Partner Communications Company Ltd (ADR) (NASDAQ:PTNR). This group of stocks belong to the wireless communications industry and their market caps resemble UBNT’s market cap.

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