Do Hedge Funds and Insiders Love IDT Corporation (IDT)?

IDT Corporation (NYSE:IDT) investors should be aware of a decrease in activity from the world’s largest hedge funds of late.

In the eyes of most stock holders, hedge funds are viewed as underperforming, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the upper echelon of this group, close to 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by watching their best investments, we have unearthed a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as key, bullish insider trading activity is another way to break down the financial markets. Obviously, there are lots of motivations for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).

With all of this in mind, let’s take a peek at the latest action surrounding IDT Corporation (NYSE:IDT).

How have hedgies been trading IDT Corporation (NYSE:IDT)?

At Q1’s end, a total of 11 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially.

According to our comprehensive database, Jim Simons’s Renaissance Technologies had the most valuable position in IDT Corporation (NYSE:IDT), worth close to $8.8 million, comprising less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Irving Kahn of Kahn Brothers, with a $8.1 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Jay Petschek and Steven Major’s Corsair Capital Management, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Zeke Ashton’s Centaur Capital Partners.

Because IDT Corporation (NYSE:IDT) has witnessed bearish sentiment from the smart money, logic holds that there was a specific group of fund managers that elected to cut their entire stakes in Q1. Intriguingly, Murray Stahl’s Horizon Asset Management sold off the largest stake of the “upper crust” of funds we key on, comprising about $0.3 million in stock. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with IDT Corporation (NYSE:IDT)?

Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the last 180-day time period, IDT Corporation (NYSE:IDT) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to IDT Corporation (NYSE:IDT). These stocks are RigNet Inc (NASDAQ:RNET), Cbeyond, Inc. (NASDAQ:CBEY), Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM), ORBCOMM Inc (NASDAQ:ORBC), and Lumos Networks Corp (NASDAQ:LMOS). This group of stocks are the members of the diversified communication services industry and their market caps are similar to IDT’s market cap.

With the results exhibited by our research, retail investors should always watch hedge fund and insider trading sentiment, and IDT Corporation (NYSE:IDT) shareholders fit into this picture quite nicely.

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