Hedge Funds Are Dumping Dex One Corporation (DEXO): Harte-Hanks, Inc. (HHS), Constant Contact Inc (CTCT)

Is Dex One Corporation (NYSE:DEXO) going to take off soon? Investors who are in the know are in a bearish mood. The number of long hedge fund positions retreated by 1 in recent months.

If you’d ask most traders, hedge funds are seen as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds trading at present, we at Insider Monkey hone in on the elite of this club, around 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top picks, we have formulated a number of investment strategies that have historically outstripped the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as integral, positive insider trading activity is another way to parse down the investments you’re interested in. As the old adage goes: there are a number of motivations for an executive to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this strategy if piggybackers understand what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the key action encompassing Dex One Corporation (NYSE:DEXO).

Hedge fund activity in Dex One Corporation (NYSE:DEXO)

At the end of the fourth quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -11% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

Of the funds we track, Hayman Advisors, managed by Kyle Bass, holds the most valuable position in Dex One Corporation (NYSE:DEXO). Hayman Advisors has a $8 million position in the stock, comprising 4.7% of its 13F portfolio. On Hayman Advisors’s heels is Paulson & Co, managed by John Paulson, which held a $6 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Eric Semler’s TCS Capital Management, Jim Simons’s Renaissance Technologies and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Seeing as Dex One Corporation (NYSE:DEXO) has experienced a declination in interest from hedge fund managers, we can see that there exists a select few hedgies that elected to cut their entire stakes in Q4. Interestingly, Anand Parekh’s Alyeska Investment Group sold off the largest position of the “upper crust” of funds we monitor, totaling close to $2 million in stock.. Sander Gerber’s fund, Hudson Bay Capital Management, also dropped its stock, about $0 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds in Q4.

How are insiders trading Dex One Corporation (NYSE:DEXO)?

Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past half-year. Over the last six-month time period, Dex One Corporation (NYSE:DEXO) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Dex One Corporation (NYSE:DEXO). These stocks are Harte-Hanks, Inc. (NYSE:HHS), Constant Contact Inc (NASDAQ:CTCT), Insignia Systems, Inc. (NASDAQ:ISIG), Marchex, Inc. (NASDAQ:MCHX), and AirMedia Group Inc (ADR) (NASDAQ:AMCN). This group of stocks are the members of the marketing services industry and their market caps are closest to DEXO’s market cap.