Hedge Funds Are Buying MicroStrategy Incorporated (MSTR)

Is MicroStrategy Incorporated (NASDAQ:MSTR) a splendid stock to buy now? Investors who are in the know are turning bullish. The number of bullish hedge fund positions advanced by 2 lately.

In the 21st century investor’s toolkit, there are tons of methods investors can use to analyze publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace their index-focused peers by a superb margin (see just how much).

Equally as important, positive insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are plenty of reasons for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).

With these “truths” under our belt, let’s take a glance at the latest action surrounding MicroStrategy Incorporated (NASDAQ:MSTR).

Hedge fund activity in MicroStrategy Incorporated (NASDAQ:MSTR)

At the end of the first quarter, a total of 17 of the hedge funds we track were bullish in this stock, a change of 13% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, Ricky Sandler’s Eminence Capital had the largest position in MicroStrategy Incorporated (NASDAQ:MSTR), worth close to $81.7 million, comprising 2.1% of its total 13F portfolio. Sitting at the No. 2 spot is Manatuck Hill Partners, managed by Mark Broach, which held a $14.2 million position; 1.8% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Sanford J. Colen’s Apex Capital, Steven Cohen’s SAC Capital Advisors and Andrew Sandler’s Sandler Capital Management.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Manatuck Hill Partners, managed by Mark Broach, initiated the largest position in MicroStrategy Incorporated (NASDAQ:MSTR). Manatuck Hill Partners had 14.2 million invested in the company at the end of the quarter. Andrew Sandler’s Sandler Capital Management also initiated a $11.4 million position during the quarter. The other funds with brand new MSTR positions are Glenn J. Krevlin’s Glenhill Advisors, Matthew Hulsizer’s PEAK6 Capital Management, and Matthew Tewksbury’s Stevens Capital Management.

How have insiders been trading MicroStrategy Incorporated (NASDAQ:MSTR)?

Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the last 180-day time frame, MicroStrategy Incorporated (NASDAQ:MSTR) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to MicroStrategy Incorporated (NASDAQ:MSTR). These stocks are Interactive Intelligence Group Inc (NASDAQ:ININ), Blackbaud, Inc. (NASDAQ:BLKB), NetScout Systems, Inc. (NASDAQ:NTCT), Pegasystems Inc. (NASDAQ:PEGA), and Bottomline Technologies (NASDAQ:EPAY). This group of stocks are the members of the business software & services industry and their market caps resemble MSTR’s market cap.

With the returns shown by our tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and MicroStrategy Incorporated (NASDAQ:MSTR) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds