Is Emulex Corporation (NYSE:ELX) a buy here? Prominent investors are getting more bullish. The number of long hedge fund positions advanced by 2 in recent months.
In the 21st century investor’s toolkit, there are plenty of metrics market participants can use to monitor stocks. A pair of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform their index-focused peers by a very impressive margin (see just how much).
Equally as important, bullish insider trading sentiment is another way to break down the stock market universe. There are a number of reasons for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if you understand where to look (learn more here).
Consequently, it’s important to take a look at the recent action surrounding Emulex Corporation (NYSE:ELX).
What have hedge funds been doing with Emulex Corporation (NYSE:ELX)?
Heading into Q2, a total of 21 of the hedge funds we track were bullish in this stock, a change of 11% from the first quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.
According to our comprehensive database, Elliott Management, managed by Paul Singer, holds the biggest position in Emulex Corporation (NYSE:ELX). Elliott Management has a $58.3 million position in the stock, comprising 1.2% of its 13F portfolio. Sitting at the No. 2 spot is Altai Capital, managed by Rishi Bajaj, Toby Symonds, and Steve Tesoriere, which held a $31.7 million position; the fund has 12.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Youlia Miteva’s Proxima Capital Management, Chuck Royce’s Royce & Associates and Matthew Knauer and Mina Faltas’s Nokota Management.
As aggregate interest increased, some big names have jumped into Emulex Corporation (NYSE:ELX) headfirst. Freshford Capital Management, managed by Michael Doheny, initiated the biggest position in Emulex Corporation (NYSE:ELX). Freshford Capital Management had 3.3 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and Matthew Hulsizer’s PEAK6 Capital Management.
What do corporate executives and insiders think about Emulex Corporation (NYSE:ELX)?
Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last 180-day time frame, Emulex Corporation (NYSE:ELX) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Emulex Corporation (NYSE:ELX). These stocks are STEC, Inc. (NASDAQ:STEC), Fusion-IO, Inc. (NYSE:FIO), Datalink Corporation (NASDAQ:DTLK), Xyratex Ltd. (NASDAQ:XRTX), and Quantum Corp (NYSE:QTM). This group of stocks are the members of the data storage devices industry and their market caps match ELX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|STEC, Inc. (NASDAQ:STEC)||15||2||0|
|Fusion-IO, Inc. (NYSE:FIO)||17||0||8|
|Datalink Corporation (NASDAQ:DTLK)||7||0||5|
|Xyratex Ltd. (NASDAQ:XRTX)||9||0||0|
|Quantum Corp (NYSE:QTM)||11||1||0|
With the results demonstrated by the aforementioned strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Emulex Corporation (NYSE:ELX) applies perfectly to this mantra.