Electronics For Imaging, Inc. (EFII): Insiders Aren’t Crazy About It But Hedge Funds Love It

Is Electronics For Imaging, Inc. (NASDAQ:EFII) a good investment?

In the eyes of many of your fellow readers, hedge funds are viewed as delayed, old financial tools of a period lost to current times. Although there are over 8,000 hedge funds with their doors open currently, Insider Monkey aim at the bigwigs of this group, about 525 funds. Analysts calculate that this group oversees the majority of all hedge funds’ total assets, and by tracking their highest quality equity investments, we’ve formulated a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as key, optimistic insider trading activity is another way to look at the investments you’re interested in. There are a number of stimuli for an insider to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if investors understand what to do (learn more here).

What’s more, let’s examine the latest info for Electronics For Imaging, Inc. (NASDAQ:EFII).

What does the smart money think about Electronics For Imaging, Inc. (NASDAQ:EFII)?

At Q2’s end, a total of 17 of the hedge funds we track were long in this stock, a change of 21% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably.

When using filings from the hedgies we track, Martin Whitman’s Third Avenue Management had the biggest position in Electronics For Imaging, Inc. (NASDAQ:EFII), worth close to $43.2 million, comprising 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Cadian Capital, managed by Eric Bannasch, which held a $40.8 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other peers with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies and Mark N. Diker’s Diker Management.

With a general bullishness amongst the titans, specific money managers were leading the bulls’ herd. Third Avenue Management, managed by Martin Whitman, assembled the most valuable position in Electronics For Imaging, Inc. (NASDAQ:EFII). Third Avenue Management had 43.2 million invested in the company at the end of the quarter. Eric Bannasch’s Cadian Capital also initiated a $40.8 million position during the quarter. The other funds with brand new EFII positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies, and Mark N. Diker’s Diker Management.

What have insiders been doing with Electronics For Imaging, Inc. (NASDAQ:EFII)?

Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time frame, Electronics For Imaging, Inc. (NASDAQ:EFII) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Electronics For Imaging, Inc. (NASDAQ:EFII). These stocks are Intermec Inc. (NYSE:IN), Nice Systems Ltd (ADR) (NASDAQ:NICE), Universal Display Corporation (NASDAQ:PANL), Synaptics, Incorporated (NASDAQ:SYNA), and Logitech International SA (USA) (NASDAQ:LOGI). All of these stocks are in the computer peripherals industry and their market caps are closest to EFII’s market cap.

Using the returns explained by Insider Monkey’s analyses, regular investors must always watch hedge fund and insider trading activity, and Electronics For Imaging, Inc. (NASDAQ:EFII) is no exception.

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