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Splunk Inc (SPLK): Are Hedge Funds Right About This Stock?

Splunk Inc (NASDAQ:SPLK) has a surprisingly devoted segment of the hedge fund industry invested in shares of its common stock.

At the moment, there are many methods investors can use to track their holdings. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the market by a significant amount (see just how much).

Equally as key, bullish insider trading sentiment is a second way to look at the financial markets. Just as you’d expect, there are a variety of motivations for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).

Now that that’s out of the way, let’s examine the latest info for Splunk Inc (NASDAQ:SPLK).

Splunk Inc (NASDAQ:SPLK)

How have hedgies been trading Splunk Inc (NASDAQ:SPLK)?

At Q2’s end, a total of 32 of the hedge funds we track were long in this stock, a change of 7% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly.

When using filings from the hedgies we track, Criterion Capital, managed by Christopher Lord, holds the largest position in Splunk Inc (NASDAQ:SPLK). Criterion Capital has a $106.1 million position in the stock, comprising 4.3% of its 13F portfolio. Sitting at the No. 2 spot is GLG Partners, managed by Noam Gottesman, which held a $59 million position; 2.2% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Steven Cohen’s SAC Capital Advisors.

Consequently, certain bigger names were breaking ground themselves. Criterion Capital, managed by Christopher Lord, created the most valuable position in Splunk Inc (NASDAQ:SPLK). Criterion Capital had 106.1 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $59 million position during the quarter. The other funds with brand new SPLK positions are Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group, and Steven Cohen’s SAC Capital Advisors.

Insider trading activity in Splunk Inc (NASDAQ:SPLK)

Legal insider trading, particularly when it’s bullish, is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time frame, Splunk Inc (NASDAQ:SPLK) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Splunk Inc (NASDAQ:SPLK). These stocks are MICROS Systems, Inc. (NASDAQ:MCRS), CommVault Systems, Inc. (NASDAQ:CVLT), Msci Inc (NYSE:MSCI), Fortinet Inc (NASDAQ:FTNT), and Cadence Design Systems Inc (NASDAQ:CDNS). This group of stocks belong to the application software industry and their market caps resemble SPLK’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
MICROS Systems, Inc. (NASDAQ:MCRS) 25 0 0
CommVault Systems, Inc. (NASDAQ:CVLT) 20 0 0
Msci Inc (NYSE:MSCI) 16 0 0
Fortinet Inc (NASDAQ:FTNT) 27 0 0
Cadence Design Systems Inc (NASDAQ:CDNS) 21 0 0

Using the returns demonstrated by our strategies, regular investors must always pay attention to hedge fund and insider trading activity, and Splunk Inc (NASDAQ:SPLK) shareholders fit into this picture quite nicely.

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