Limelight Networks, Inc. (NASDAQ:LLNW) has seen an increase in hedge fund interest in recent months.
According to most investors, hedge funds are assumed to be underperforming, outdated financial vehicles of the past. While there are over 8000 funds trading at the moment, we look at the masters of this club, around 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total asset base, and by paying attention to their top picks, we have formulated a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as integral, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are many stimuli for an insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
With all of this in mind, we’re going to take a glance at the key action surrounding Limelight Networks, Inc. (NASDAQ:LLNW).
How are hedge funds trading Limelight Networks, Inc. (NASDAQ:LLNW)?
Heading into 2013, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, AQR Capital Management, managed by Cliff Asness, holds the biggest position in Limelight Networks, Inc. (NASDAQ:LLNW). AQR Capital Management has a $1.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On AQR Capital Management’s heels is Lanexa Global Management, managed by Ian P. Murray, which held a $1.7 million position; 2.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
As one would reasonably expect, some big names were leading the bulls’ herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, initiated the largest position in Limelight Networks, Inc. (NASDAQ:LLNW). Two Sigma Advisors had 0.2 million invested in the company at the end of the quarter.
How have insiders been trading Limelight Networks, Inc. (NASDAQ:LLNW)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time period, Limelight Networks, Inc. (NASDAQ:LLNW) has experienced 2 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Limelight Networks, Inc. (NASDAQ:LLNW). These stocks are Reis Inc (NASDAQ:REIS), PowerSecure International, Inc. (NASDAQ:POWR), Digital Generation Inc (NASDAQ:DGIT), Swisher Hygiene, Inc. (NASDAQ:SWSH), and PRGX Global Inc (NASDAQ:PRGX). This group of stocks belong to the business services industry and their market caps match LLNW’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Reis Inc (NASDAQ:REIS)||3||0||0|
|PowerSecure International, Inc. (NASDAQ:POWR)||2||1||0|
|Digital Generation Inc (NASDAQ:DGIT)||9||3||0|
|Swisher Hygiene, Inc. (NASDAQ:SWSH)||3||0||0|
|PRGX Global Inc (NASDAQ:PRGX)||7||0||1|
With the results exhibited by our tactics, everyday investors must always monitor hedge fund and insider trading sentiment, and Limelight Networks, Inc. (NASDAQ:LLNW) is an important part of this process.