Do Hedge Funds and Insiders Love Jive Software Inc (JIVE)? – Insight Enterprises, Inc. (NSIT), Imperva Inc (IMPV)

Jive Software Inc (NASDAQ:JIVE) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. JIVE has seen a decrease in hedge fund interest in recent months. There were 14 hedge funds in our database with JIVE positions at the end of the previous quarter.

To most traders, hedge funds are viewed as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey choose to focus on the leaders of this group, close to 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total asset base, and by watching their highest performing investments, we have unearthed a number of investment strategies that have historically outperformed the market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).

Just as important, positive insider trading activity is another way to break down the stock market universe. Obviously, there are lots of stimuli for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” understand where to look (learn more here).

Now, let’s take a glance at the latest action surrounding Jive Software Inc (NASDAQ:JIVE).

What have hedge funds been doing with Jive Software Inc (NASDAQ:JIVE)?

At year’s end, a total of 10 of the hedge funds we track were long in this stock, a change of -29% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.

Of the funds we track, Scott Fine and Peter Richards’s Empire Capital Management had the largest position in Jive Software Inc (NASDAQ:JIVE), worth close to $36 million, accounting for 4.8% of its total 13F portfolio. Coming in second is PAR Capital Management, managed by Paul Reeder and Edward Shapiro, which held a $9 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Charles Clough’s Clough Capital Partners, David Keidan’s Buckingham Capital Management and Anand Parekh’s Alyeska Investment Group.

Judging by the fact that Jive Software Inc (NASDAQ:JIVE) has experienced declining sentiment from the smart money, it’s easy to see that there was a specific group of funds who sold off their entire stakes heading into 2013. At the top of the heap, Seymour Sy Kaufman and Michael Stark’s Crosslink Capital dropped the biggest position of the 450+ funds we watch, comprising close to $8 million in stock., and Israel Englander of Catapult Capital Management was right behind this move, as the fund dumped about $5 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds heading into 2013.

What do corporate executives and insiders think about Jive Software Inc (NASDAQ:JIVE)?

Insider buying is best served when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time period, Jive Software Inc (NASDAQ:JIVE) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Jive Software Inc (NASDAQ:JIVE). These stocks are Lifelock Inc (NYSE:LOCK), FleetMatics Group PLC (NYSE:FLTX), Monotype Imaging Holdings Inc. (NASDAQ:TYPE), Insight Enterprises, Inc. (NASDAQ:NSIT), and Imperva Inc (NYSE:IMPV). All of these stocks are in the application software industry and their market caps are closest to JIVE’s market cap.

With the returns demonstrated by the aforementioned research, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Jive Software Inc (NASDAQ:JIVE) applies perfectly to this mantra.

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