Saba Software, Inc. (SABA): Are Hedge Funds Right About This Stock?

Saba Software, Inc. (NASDAQ:SABA)Is Saba Software, Inc. (NASDAQ:SABA) an excellent investment today? The smart money is turning less bullish. The number of long hedge fund bets fell by 1 recently.

In the 21st century investor’s toolkit, there are tons of methods shareholders can use to watch stocks. Some of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace their index-focused peers by a very impressive margin (see just how much).

Equally as key, positive insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are a variety of stimuli for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know where to look (learn more here).

With all of this in mind, we’re going to take a glance at the recent action regarding Saba Software, Inc. (NASDAQ:SABA).

How have hedgies been trading Saba Software, Inc. (NASDAQ:SABA)?

At year’s end, a total of 7 of the hedge funds we track were long in this stock, a change of -13% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes substantially.

Of the funds we track, Philip Hempleman’s Ardsley Partners had the most valuable position in Saba Software, Inc. (NASDAQ:SABA), worth close to $14.7 million, accounting for 3% of its total 13F portfolio. Coming in second is Seymour Sy Kaufman and Michael Stark of Crosslink Capital, with a $6.4 million position; 0.7% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Israel Englander’s Millennium Management, Peter A. Wright’s P.A.W. CAPITAL PARTNERS and Ken Griffin’s Citadel Investment Group.

Due to the fact that Saba Software, Inc. (NASDAQ:SABA) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of funds that slashed their positions entirely heading into 2013. It’s worth mentioning that Richard Driehaus’s Driehaus Capital dumped the largest stake of the 450+ funds we track, worth an estimated $0.7 million in stock., and J. Carlo Cannell of Cannell Capital was right behind this move, as the fund dumped about $0.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds heading into 2013.

How are insiders trading Saba Software, Inc. (NASDAQ:SABA)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, Saba Software, Inc. (NASDAQ:SABA) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Saba Software, Inc. (NASDAQ:SABA). These stocks are Callidus Software Inc. (NASDAQ:CALD), Sapiens International Corporation N.V. (NASDAQ:SPNS), Formula Systems (1985) Ltd. (ADR) (NASDAQ:FORTY), and Procera Networks, Inc. (NASDAQ:PKT). This group of stocks are the members of the business software & services industry and their market caps resemble SABA’s market cap.