Juniper Networks, Inc. (NYSE:JNPR) shareholders have witnessed an increase in hedge fund sentiment in recent months. This is intriguing, because earlier this morning, Juniper Networks was upgraded by Argus to a “buy” from a “hold,” citing, “JNPR has historically commanded a sizable premium to the peer group weighted-average P/E. However, it has now lost that premium and trades at a discount to the peer average.”
According to most investors, hedge funds are seen as worthless, outdated financial tools of the past. While there are greater than 8000 funds trading at the moment, we choose to focus on the moguls of this club, close to 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by watching their top investments, we have discovered a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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).
Equally as key, bullish insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are a number of reasons for an executive to sell shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).
With all of this in mind, we’re going to take a glance at the recent action surrounding Juniper Networks, Inc. (NYSE:JNPR).
Hedge fund activity in Juniper Networks, Inc. (NYSE:JNPR)
At the end of the fourth quarter, a total of 29 of the hedge funds we track held long positions in this stock, a change of 21% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the largest position in Juniper Networks, Inc. (NYSE:JNPR), worth close to $151.8 million, accounting for 0.2% of its total 13F portfolio. On Citadel Investment Group’s heels is Diamond Hill Capital, managed by Ric Dillon, which held a $81.9 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Glenn Russell Dubin’s Highbridge Capital Management, Steven Cohen’s SAC Capital Advisors and Daniel Benton’s Andor Capital Management.
As industrywide interest jumped, specific money managers have jumped into Juniper Networks, Inc. (NYSE:JNPR) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, assembled the biggest position in Juniper Networks, Inc. (NYSE:JNPR). Highbridge Capital Management had 57.3 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also initiated a $12.8 million position during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Philippe Jabre’s Jabre Capital Partners, and SAC Subsidiary’s Sigma Capital Management.
What do corporate executives and insiders think about Juniper Networks, Inc. (NYSE:JNPR)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past six months. Over the latest six-month time period, Juniper Networks, Inc. (NYSE:JNPR) has seen 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Juniper Networks, Inc. (NYSE:JNPR). These stocks are Cisco Systems, Inc. (NASDAQ:CSCO), Finisar Corporation (NASDAQ:FNSR), Riverbed Technology, Inc. (NASDAQ:RVBD), Aruba Networks, Inc. (NASDAQ:ARUN), and Palo Alto Networks Inc (NYSE:PANW). This group of stocks belong to the networking & communication devices industry and their market caps are similar to JNPR’s market cap.
