Do Hedge Funds and Insiders Love BMC Software, Inc. (BMC)?

Is BMC Software, Inc. (NASDAQ:BMC) ready to rally soon? Money managers are turning bullish. The number of long hedge fund bets went up by 14 in recent months.

In the 21st century investor’s toolkit, there are a multitude of metrics investors can use to monitor their holdings. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outperform the market by a superb margin (see just how much).

Equally as key, positive insider trading sentiment is another way to break down the marketplace. There are lots of reasons for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).

Consequently, it’s important to take a glance at the key action regarding BMC Software, Inc. (NASDAQ:BMC).

How are hedge funds trading BMC Software, Inc. (NASDAQ:BMC)?

In preparation for this quarter, a total of 35 of the hedge funds we track were bullish in this stock, a change of 67% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Paul Singer’s Elliott Management had the biggest position in BMC Software, Inc. (NASDAQ:BMC), worth close to $634.5 million, comprising 13.3% of its total 13F portfolio. The second largest stake is held by Larry Robbins of Glenview Capital, with a $183.3 million position; 1.9% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Barry Rosenstein’s JANA Partners, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

As one would reasonably expect, some big names have jumped into BMC Software, Inc. (NASDAQ:BMC) headfirst. JANA Partners, managed by Barry Rosenstein, assembled the biggest position in BMC Software, Inc. (NASDAQ:BMC). JANA Partners had 164.8 million invested in the company at the end of the quarter. George Soros’s Soros Fund Management also made a $30.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Clint Carlson’s Carlson Capital, SAC Subsidiary’s Sigma Capital Management, and Daniel S. Och’s OZ Management.

What do corporate executives and insiders think about BMC Software, Inc. (NASDAQ:BMC)?

Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, BMC Software, Inc. (NASDAQ:BMC) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to BMC Software, Inc. (NASDAQ:BMC). These stocks are Workday Inc (NYSE:WDAY), SolarWinds Inc (NYSE:SWI), Red Hat, Inc. (NYSE:RHT), F5 Networks, Inc. (NASDAQ:FFIV), and Nuance Communications Inc. (NASDAQ:NUAN). All of these stocks are in the application software industry and their market caps are closest to BMC’s market cap.