AsiaInfo-Linkage, Inc. (NASDAQ:ASIA) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. ASIA shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 8 hedge funds in our database with ASIA positions at the end of the previous quarter.
To most shareholders, hedge funds are assumed to be worthless, old financial tools of years past. While there are more than 8000 funds with their doors open at present, we hone in on the crème de la crème of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total capital, and by monitoring their top stock picks, we have spotted a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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, optimistic insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are lots of stimuli for an executive to downsize shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).
Keeping this in mind, let’s take a peek at the recent action surrounding AsiaInfo-Linkage, Inc. (NASDAQ:ASIA).
How are hedge funds trading AsiaInfo-Linkage, Inc. (NASDAQ:ASIA)?
At year’s end, a total of 9 of the hedge funds we track were long in this stock, a change of 13% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
Of the funds we track, Frank Brosens’s Taconic Capital had the largest position in AsiaInfo-Linkage, Inc. (NASDAQ:ASIA), worth close to $10.9 million, comprising 0.6% of its total 13F portfolio. On Taconic Capital’s heels is James Dinan of York Capital Management, with a $2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Brian Taylor’s Pine River Capital Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, specific money managers have jumped into AsiaInfo-Linkage, Inc. (NASDAQ:ASIA) headfirst. York Capital Management, managed by James Dinan, assembled the biggest position in AsiaInfo-Linkage, Inc. (NASDAQ:ASIA). York Capital Management had 2 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Philip Hempleman’s Ardsley Partners.
What have insiders been doing with AsiaInfo-Linkage, Inc. (NASDAQ:ASIA)?
Insider buying is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time period, AsiaInfo-Linkage, Inc. (NASDAQ:ASIA) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to AsiaInfo-Linkage, Inc. (NASDAQ:ASIA). These stocks are Intralinks Holdings Inc (NYSE:IL), Sourcefire, Inc. (NASDAQ:FIRE), Brady Corp (NYSE:BRC), KEYW Holding Corp. (NASDAQ:KEYW), and Mantech International Corp (NASDAQ:MANT). All of these stocks are in the security software & services industry and their market caps resemble ASIA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Intralinks Holdings Inc (NYSE:IL) | 15 | 0 | 0 |
| Sourcefire, Inc. (NASDAQ:FIRE) | 14 | 0 | 9 |
| Brady Corp (NYSE:BRC) | 13 | 0 | 11 |
| KEYW Holding Corp. (NASDAQ:KEYW) | 4 | 0 | 2 |
| Mantech International Corp (NASDAQ:MANT) | 11 | 0 | 2 |
With the returns exhibited by the aforementioned time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and AsiaInfo-Linkage, Inc. (NASDAQ:ASIA) applies perfectly to this mantra.
