Polycom Inc (NASDAQ:PLCM) has rallied by 6% following a Wall Street Journal article stating that a second buyer has made a revised offer in which Polycom might find as ‘superior’ to the current one offered by Mitel Networks Corporation (NASDAQ:MITL) where Polycom shareholders would own 60% of the combination of the two. The second buyer, a private equity firm, offered two choices. Here’s how the Wall Street Journal put it:
“The unidentified private-equity firm presented two plans: an $11-a-share cash dividend, or the choice to trade the dividend for a new convertible preferred stock; or a “take private” deal of $11.50-a-share in cash with a contingent of up to $3 a share.”
If investors take up the second plan, and get all of the contingent of $3 per share, Polycom Inc (NASDAQ:PLCM) would have more upside left. Hedge funds are bullish on Polycom and the number of funds with long positions went up by four during the first quarter. Overall, 22 funds from the Insider Monkey database held long positions in Polycom as of the end of March. At the end of this article we will also compare PLCM to other stocks, including Ophthotech Corp (NASDAQ:OPHT), AAON, Inc. (NASDAQ:AAON), and Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) to get a better sense of its popularity.
If you’d ask most investors, hedge funds are viewed as unimportant, old investment vehicles of yesteryear. While there are over 8000 funds in operation today, We choose to focus on the elite of this group, approximately 700 funds. It is estimated that this group of investors have their hands on the majority of all hedge funds’ total asset base, and by shadowing their inimitable picks, Insider Monkey has discovered several investment strategies that have historically surpassed the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With this in mind, let’s take a closer look at the funds that have been invested in Polycom heading into the second quarter.