Hedge Funds Are Betting On Immersion Corporation (IMMR)

Is Immersion Corporation (NASDAQ:IMMR) a bargain? Hedge funds are becoming hopeful. The number of bullish hedge fund positions advanced by 5 recently.

In the eyes of most shareholders, hedge funds are viewed as worthless, old financial tools of the past. While there are over 8000 funds with their doors open at present, we hone in on the bigwigs of this club, about 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds’ total asset base, and by keeping an eye on their highest performing investments, we have deciphered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed 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 (see all of our picks from August).

Just as beneficial, positive insider trading activity is another way to parse down the marketplace. There are many reasons for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this tactic if “monkeys” understand where to look (learn more here).

Now, we’re going to take a glance at the latest action surrounding Immersion Corporation (NASDAQ:IMMR).

How are hedge funds trading Immersion Corporation (NASDAQ:IMMR)?

At Q1’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of 56% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, John Fichthorn’s Dialectic Capital Management had the biggest position in Immersion Corporation (NASDAQ:IMMR), worth close to $27.3 million, comprising 3.5% of its total 13F portfolio. Coming in second is Spencer M. Waxman of Shannon River Fund Management, with a $22.8 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Chuck Royce’s Royce & Associates, Donald Chiboucis’s Columbus Circle Investors and Matthew Hulsizer’s PEAK6 Capital Management.

As aggregate interest increased, some big names were breaking ground themselves. Columbus Circle Investors, managed by Donald Chiboucis, assembled the most valuable position in Immersion Corporation (NASDAQ:IMMR). Columbus Circle Investors had 1.4 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.8 million position during the quarter. The following funds were also among the new IMMR investors: Israel Englander’s Millennium Management, Steven Cohen’s SAC Capital Advisors, and Jay Petschek and Steven Major’s Corsair Capital Management.

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

Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the last 180-day time period, Immersion Corporation (NASDAQ:IMMR) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s go over 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). All of these stocks are in the computer peripherals industry and their market caps are closest to IMMR’s market cap.

With the returns demonstrated by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Immersion Corporation (NASDAQ:IMMR) is no exception.

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