Hedge Funds Are Betting On Rovi Corporation (ROVI)

Rovi Corporation (NASDAQ:ROVI) was in 18 hedge funds’ portfolio at the end of the first quarter of 2013. ROVI has experienced an increase in enthusiasm from smart money recently. There were 17 hedge funds in our database with ROVI holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are plenty of methods market participants can use to watch stocks. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the S&P 500 by a very impressive amount (see just how much).

Equally as important, bullish insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are a variety of stimuli for an insider to cut shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the useful potential of this tactic if investors understand where to look (learn more here).

With all of this in mind, it’s important to take a look at the recent action encompassing Rovi Corporation (NASDAQ:ROVI).

How are hedge funds trading Rovi Corporation (NASDAQ:ROVI)?

In preparation for this quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 6% from the first quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Larry Robbins’s Glenview Capital had the most valuable position in Rovi Corporation (NASDAQ:ROVI), worth close to $221.5 million, accounting for 2.3% of its total 13F portfolio. The second largest stake is held by Seth Klarman of Baupost Group, with a $174.7 million position; 5.6% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Steven Cohen’s SAC Capital Advisors.

Now, key hedge funds have been driving this bullishness. Orbis Investment Management, managed by William B. Gray, established the biggest position in Rovi Corporation (NASDAQ:ROVI). Orbis Investment Management had 17.2 million invested in the company at the end of the quarter. Jay Petschek and Steven Major’s Corsair Capital Management also initiated a $8.6 million position during the quarter. The other funds with new positions in the stock are Chuck Royce’s Royce & Associates, Jacob Gottlieb’s Visium Asset Management, and Mike Vranos’s Ellington.

How are insiders trading Rovi Corporation (NASDAQ:ROVI)?

Bullish insider trading is particularly usable when the company in question has seen transactions within the past half-year. Over the latest 180-day time period, Rovi Corporation (NASDAQ:ROVI) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Rovi Corporation (NASDAQ:ROVI). These stocks are International Game Technology (NYSE:IGT), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Changyou.Com Ltd (ADR) (NASDAQ:CYOU), and Cornerstone OnDemand, Inc. (NASDAQ:CSOD). This group of stocks are the members of the multimedia & graphics software industry and their market caps are similar to ROVI’s market cap.