In the 21st century investor’s toolkit, there are many methods shareholders can use to analyze the equity markets. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outpace the market by a healthy amount (see just how much).
Just as beneficial, bullish insider trading activity is a second way to parse down the stock market universe. Obviously, there are plenty of incentives for an insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
Consequently, we’re going to take a glance at the latest action regarding Cbeyond, Inc. (NASDAQ:CBEY).
What have hedge funds been doing with Cbeyond, Inc. (NASDAQ:CBEY)?
In preparation for this year, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Cbeyond, Inc. (NASDAQ:CBEY). Adage Capital Management has a $10 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Adage Capital Management’s heels is Jim Simons of Renaissance Technologies, with a $5.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
Due to the fact that Cbeyond, Inc. (NASDAQ:CBEY) has experienced declining sentiment from the smart money, logic holds that there were a few hedgies that slashed their entire stakes at the end of the year. At the top of the heap, Israel Englander’s Millennium Management dumped the biggest stake of the 450+ funds we track, worth an estimated $0.7 million in stock., and Cliff Asness of AQR Capital Management was right behind this move, as the fund dumped about $0.1 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds at the end of the year.
How have insiders been trading Cbeyond, Inc. (NASDAQ:CBEY)?
Bullish insider trading is most useful when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, Cbeyond, Inc. (NASDAQ:CBEY) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Cbeyond, Inc. (NASDAQ:CBEY). These stocks are Lumos Networks Corp (NASDAQ:LMOS), B Communications Ltd (NASDAQ:BCOM), IDT Corporation (NYSE:IDT), ORBCOMM Inc (NASDAQ:ORBC), and Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM). This group of stocks belong to the diversified communication services industry and their market caps are similar to CBEY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Lumos Networks Corp (NASDAQ:LMOS) | 8 | 1 | 0 |
| IDT Corporation (NYSE:IDT) | 11 | 0 | 3 |
| ORBCOMM Inc (NASDAQ:ORBC) | 5 | 0 | 2 |
| Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM) | 9 | 1 | 0 |
With the returns exhibited by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Cbeyond, Inc. (NASDAQ:CBEY) applies perfectly to this mantra.
