Hedge Funds Are Buying RadiSys Corporation (RSYS)

RadiSys Corporation (NASDAQ:RSYS) was in 8 hedge funds’ portfolio at the end of December. RSYS has seen an increase in enthusiasm from smart money in recent months. There were 7 hedge funds in our database with RSYS positions at the end of the previous quarter.

To most investors, hedge funds are seen as worthless, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we look at the moguls of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total capital, and by keeping an eye on their highest performing investments, we have deciphered a number of investment strategies that have historically outperformed the broader indices. 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 topped the S&P 500 index by 24 percentage points in 7 months (see the details here).

Equally as integral, positive insider trading activity is another way to parse down the world of equities. As the old adage goes: there are a variety of incentives for an executive to sell shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

Now, we’re going to take a peek at the latest action surrounding RadiSys Corporation (NASDAQ:RSYS).

How have hedgies been trading RadiSys Corporation (NASDAQ:RSYS)?

At the end of the fourth quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 14% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully.

Of the funds we track, David Nierenberg’s Nierenberg Investment Management had the largest position in RadiSys Corporation (NASDAQ:RSYS), worth close to $13.5 million, accounting for 9.2% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $3.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and David Cohen and Harold Levy’s Iridian Asset Management.

As industrywide interest jumped, some big names have jumped into RadiSys Corporation (NASDAQ:RSYS) headfirst. Wexford Capital, managed by Charles Davidson, established the largest position in RadiSys Corporation (NASDAQ:RSYS). Wexford Capital had 0.1 million invested in the company at the end of the quarter.

How are insiders trading RadiSys Corporation (NASDAQ:RSYS)?

Insider buying is best served when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, RadiSys Corporation (NASDAQ:RSYS) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to RadiSys Corporation (NASDAQ:RSYS). These stocks are Lexmark International Inc (NYSE:LXK), Ruckus Wireless Inc (NYSE:RKUS), XRS Corp (NASDAQ:XRSC), Omnicell, Inc. (NASDAQ:OMCL), and Concurrent Computer Corp (NASDAQ:CCUR). This group of stocks belong to the computer based systems industry and their market caps are similar to RSYS’s market cap.

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With the returns shown by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and RadiSys Corporation (NASDAQ:RSYS) is an important part of this process.

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