Should You Avoid Ciena Corporation (CIEN)?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Ciena Corporation (NASDAQ:CIEN) a safe investment now? The best stock pickers are in a bearish mood. The number of long hedge fund positions were cut by 2 in recent months. At the end of this article we will also compare CIEN to other stocks including Paycom Software Inc (NYSE:PAYC), InterXion Holding NV (NYSE:INXN), and Nu Skin Enterprises, Inc. (NYSE:NUS) to get a better sense of its popularity.

Follow Ciena Corp (NYSE:CIEN)

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How are hedge funds trading Ciena Corporation (NASDAQ:CIEN)?

Heading into the fourth quarter of 2016, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 8% from the previous quarter. Sentiment has steadily fallen over the last year, with hedge fund ownership dropping by over 25% during that time. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

HedgeFundSentimentChart

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Clint Carlson’s Carlson Capital has the largest position in Ciena Corporation (NASDAQ:CIEN), worth close to $91.6 million, accounting for 1.2% of its total 13F portfolio. On Carlson Capital’s heels is Renaissance Technologies, led by Jim Simons, holding a $40.7 million position. Remaining professional money managers that are bullish contain Anand Parekh’s Alyeska Investment Group, Mike Masters’ Masters Capital Management and Ken Griffin’s Citadel Investment Group.