Monotype Imaging Holdings Inc. (TYPE): Hedge Funds Are Bearish and Insiders Are Undecided, What Should You Do?

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Should Monotype Imaging Holdings Inc. (NASDAQ:TYPE) investors track the following data?

To the average investor, there are a multitude of methods market participants can use to track publicly traded companies. A pair of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform their index-focused peers by a very impressive margin (see just how much).

Equally as useful, optimistic insider trading sentiment is a second way to look at the marketplace. Obviously, there are plenty of stimuli for an insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if you know what to do (learn more here).

Keeping this in mind, it’s important to examine the newest info about Monotype Imaging Holdings Inc. (NASDAQ:TYPE).

Monotype Imaging Holdings Inc. (NASDAQ:TYPE)

What have hedge funds been doing with Monotype Imaging Holdings Inc. (NASDAQ:TYPE)?

At the end of the second quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -10% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly.

When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Monotype Imaging Holdings Inc. (NASDAQ:TYPE). Royce & Associates has a $28.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Trigran Investments, managed by Douglas T. Granat, which held a $9.4 million position; 4.7% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Lisa Rapuano’s Lane Five Capital and Cliff Asness’s AQR Capital Management.

Due to the fact Monotype Imaging Holdings Inc. (NASDAQ:TYPE) has experienced dropping sentiment from the entirety of the hedge funds we track, logic holds that there were a few funds who sold off their positions entirely in Q1. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management dropped the biggest stake of all the hedgies we watch, worth about $3.9 million in stock, and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dumped about $1.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds in Q1.

How are insiders trading Monotype Imaging Holdings Inc. (NASDAQ:TYPE)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in question has seen transactions within the past six months. Over the last six-month time period, Monotype Imaging Holdings Inc. (NASDAQ:TYPE) has experienced zero unique insiders buying, 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 Monotype Imaging Holdings Inc. (NASDAQ:TYPE). These stocks are Jive Software Inc (NASDAQ:JIVE), Lifelock Inc (NYSE:LOCK), FleetMatics Group PLC (NYSE:FLTX), Imperva Inc (NYSE:IMPV), and Insight Enterprises, Inc. (NASDAQ:NSIT). All of these stocks are in the application software industry and their market caps resemble TYPE’s market cap.

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