Ixia (NASDAQ:XXIA) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months.
In the eyes of most market participants, hedge funds are viewed as slow, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open at present, we look at the top tier of this club, about 450 funds. Most estimates calculate that this group oversees most of the smart money’s total capital, and by paying attention to their highest performing picks, we have uncovered a few investment strategies that have historically outstripped the S&P 500 index. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, optimistic insider trading sentiment is a second way to break down the world of equities. Obviously, there are many reasons for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).
With these “truths” under our belt, we’re going to take a peek at the recent action regarding Ixia (NASDAQ:XXIA).
What have hedge funds been doing with Ixia (NASDAQ:XXIA)?
At year’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of -30% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Brian Ashford-Russell and Tim Woolley’s Polar Capital had the biggest position in Ixia (NASDAQ:XXIA), worth close to $10 million, accounting for 0.5% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $3 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Joseph A. Jolson’s Harvest Capital Strategies, Mario Gabelli’s GAMCO Investors and Cliff Asness’s AQR Capital Management.
Since Ixia (NASDAQ:XXIA) has faced falling interest from hedge fund managers, we can see that there was a specific group of hedge funds who were dropping their entire stakes heading into 2013. Interestingly, Jim Simons’s Renaissance Technologies cut the largest position of the 450+ funds we monitor, worth about $1 million in stock.. D. E. Shaw’s fund, D E Shaw, also sold off its stock, about $1 million worth. These moves are interesting, as total hedge fund interest dropped by 3 funds heading into 2013.
How are insiders trading Ixia (NASDAQ:XXIA)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, Ixia (NASDAQ:XXIA) has experienced zero unique insiders buying, and 11 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Ixia (NASDAQ:XXIA). These stocks are Coherent, Inc. (NASDAQ:COHR), Itron, Inc. (NASDAQ:ITRI), Cognex Corporation (NASDAQ:CGNX), Geospace Technologies Corp (NASDAQ:GEOS), and Curtiss-Wright Corp. (NYSE:CW). This group of stocks are in the scientific & technical instruments industry and their market caps match XXIA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Coherent, Inc. (NASDAQ:COHR)||3||0||9|
|Itron, Inc. (NASDAQ:ITRI)||15||0||1|
|Cognex Corporation (NASDAQ:CGNX)||7||0||5|
|Geospace Technologies Corp (NASDAQ:GEOS)||12||0||4|
|Curtiss-Wright Corp. (NYSE:CW)||14||0||11|
With the results demonstrated by the aforementioned studies, retail investors must always watch hedge fund and insider trading sentiment, and Ixia (NASDAQ:XXIA) is no exception.