American Software, Inc. (NASDAQ:AMSWA) has experienced a decrease in hedge fund interest in recent months.
If you’d ask most shareholders, hedge funds are viewed as unimportant, old financial vehicles of the past. While there are over 8000 funds in operation today, we hone in on the aristocrats of this club, close to 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by keeping an eye on their top picks, we have spotted a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed 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 23.3 percentage points in 8 months (see all of our picks from August).
Equally as important, bullish insider trading sentiment is another way to parse down the marketplace. Just as you’d expect, there are lots of incentives for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this strategy if investors know where to look (learn more here).
With all of this in mind, let’s take a glance at the latest action surrounding American Software, Inc. (NASDAQ:AMSWA).
How are hedge funds trading American Software, Inc. (NASDAQ:AMSWA)?
At Q1’s end, a total of 7 of the hedge funds we track were long in this stock, a change of -13% from the first quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially.
When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the most valuable position in American Software, Inc. (NASDAQ:AMSWA), worth close to $11.3 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $3.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, John Overdeck and David Siegel’s Two Sigma Advisors and Andy Redleaf’s Whitebox Advisors.
Due to the fact that American Software, Inc. (NASDAQ:AMSWA) has faced a declination in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedgies who sold off their full holdings last quarter. Intriguingly, Cliff Asness’s AQR Capital Management dropped the biggest position of the 450+ funds we key on, comprising an estimated $0.1 million in stock. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
What do corporate executives and insiders think about American Software, Inc. (NASDAQ:AMSWA)?
Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past 180 days. Over the last 180-day time period, American Software, Inc. (NASDAQ:AMSWA) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to American Software, Inc. (NASDAQ:AMSWA). These stocks are Unwired Planet Inc (NASDAQ:UPIP), QAD Inc. (NASDAQ:QADA), Market Leader Inc (NASDAQ:LEDR), Agilysys, Inc. (NASDAQ:AGYS), and Zix Corporation (NASDAQ:ZIXI). This group of stocks belong to the application software industry and their market caps resemble AMSWA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Unwired Planet Inc (NASDAQ:UPIP)||13||0||0|
|QAD Inc. (NASDAQ:QADA)||3||0||2|
|Market Leader Inc (NASDAQ:LEDR)||6||0||2|
|Agilysys, Inc. (NASDAQ:AGYS)||5||0||0|
|Zix Corporation (NASDAQ:ZIXI)||6||5||3|
With the results exhibited by our tactics, everyday investors should always watch hedge fund and insider trading sentiment, and American Software, Inc. (NASDAQ:AMSWA) shareholders fit into this picture quite nicely.