EPIQ Systems, Inc. (EPIQ): Are Hedge Funds Right About This Stock?

EPIQ Systems, Inc. (NASDAQ:EPIQ) was in 5 hedge funds’ portfolio at the end of December. EPIQ investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. There were 6 hedge funds in our database with EPIQ holdings at the end of the previous quarter.

If you’d ask most traders, hedge funds are assumed to be slow, outdated investment vehicles of the past. While there are over 8000 funds with their doors open at present, we at Insider Monkey hone in on the bigwigs of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by keeping an eye on their best equity investments, we have formulated a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as beneficial, bullish insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are plenty of stimuli for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

Now, we’re going to take a gander at the key action encompassing EPIQ Systems, Inc. (NASDAQ:EPIQ).

What have hedge funds been doing with EPIQ Systems, Inc. (NASDAQ:EPIQ)?

In preparation for this year, a total of 5 of the hedge funds we track held long positions in this stock, a change of -17% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.

Of the funds we track, Claus Moller’s P2 Capital Partners had the most valuable position in EPIQ Systems, Inc. (NASDAQ:EPIQ), worth close to $20.8 million, comprising 4% of its total 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $1.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that are bullish include Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.

Due to the fact that EPIQ Systems, Inc. (NASDAQ:EPIQ) has experienced falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that slashed their positions entirely heading into 2013. Interestingly, Mark Travis’s Intrepid Capital Management said goodbye to the biggest position of the 450+ funds we track, totaling close to $31.6 million in stock. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds heading into 2013.

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

Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past 180 days. Over the last half-year time period, EPIQ Systems, Inc. (NASDAQ:EPIQ) has experienced 2 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to EPIQ Systems, Inc. (NASDAQ:EPIQ). These stocks are Sykes Enterprises, Incorporated (NASDAQ:SYKE), Computer Task Group, Inc. (NASDAQ:CTGX), Virtusa Corporation (NASDAQ:VRTU), 21Vianet Group Inc (NASDAQ:VNET), and Greenway Medical Technologies, Inc. (NYSE:GWAY). All of these stocks are in the information technology services industry and their market caps resemble EPIQ’s market cap.

With the returns shown by the aforementioned studies, retail investors must always watch hedge fund and insider trading sentiment, and EPIQ Systems, Inc. (NASDAQ:EPIQ) applies perfectly to this mantra.

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