Do Hedge Funds and Insiders Love Immersion Corporation (IMMR)?

Is Immersion Corporation (NASDAQ:IMMR) going to take off soon? The best stock pickers are reducing their bets on the stock. The number of bullish hedge fund positions went down by 1 recently.

According to most investors, hedge funds are assumed to be slow, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading today, we at Insider Monkey choose to focus on the elite of this group, around 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by tracking their best stock picks, we have found a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as beneficial, optimistic insider trading sentiment is another way to break down the investments you’re interested in. There are plenty of incentives for an insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this method if piggybackers know what to do (learn more here).

With all of this in mind, let’s take a glance at the latest action encompassing Immersion Corporation (NASDAQ:IMMR).

Hedge fund activity in Immersion Corporation (NASDAQ:IMMR)

At year’s end, a total of 8 of the hedge funds we track were long in this stock, a change of -11% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings significantly.

According to our comprehensive database, Dialectic Capital Management, managed by John Fichthorn, holds the biggest position in Immersion Corporation (NASDAQ:IMMR). Dialectic Capital Management has a $16 million position in the stock, comprising 1.7% of its 13F portfolio. Coming in second is Spencer M. Waxman of Shannon River Fund Management, with a $13.1 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Other peers that hold long positions include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Cliff Asness’s AQR Capital Management.

Seeing as Immersion Corporation (NASDAQ:IMMR) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedge funds who were dropping their full holdings at the end of the year. Intriguingly, Ian P. Murray’s Lanexa Global Management dumped the biggest position of the 450+ funds we watch, worth about $0.4 million in stock.. Philip Hempleman’s fund, Ardsley Partners, also cut its stock, about $0.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds at the end of the year.

What do corporate executives and insiders think about Immersion Corporation (NASDAQ:IMMR)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past six months. Over the last half-year time frame, Immersion Corporation (NASDAQ:IMMR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Immersion Corporation (NASDAQ:IMMR). These stocks are Identive Group, Inc. (NASDAQ:INVE), Key Tronic Corporation (NASDAQ:KTCC), Acorn Energy Inc (NASDAQ:ACFN), Intermec Inc. (NYSE:IN), and Mercury Systems Inc (NASDAQ:MRCY). This group of stocks are in the computer peripherals industry and their market caps are similar to IMMR’s market cap.