Hedge Funds Are Dumping Interactive Intelligence Group Inc (ININ)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Interactive Intelligence Group Inc (NASDAQ:ININ), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Interactive Intelligence Group Inc (NASDAQ:ININ) was in 9 hedge funds’ portfolios at the end of September. Interactive Intelligence Group Inc (NASDAQ:ININ) has experienced a decrease in hedge fund interest of late. There were 10 hedge funds in our database with Interactive Intelligence Group Inc (NASDAQ:ININ) holdings at the end of the previous quarter. The same may not come as a surprise to most, as the stock of Interactive Intelligence Group Inc lost 33.19% over the last quarter. We will cover hedgies that held stakes in Interactive Intelligence Group Inc (NASDAQ:ININ), at the end of the previous quarter.

The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Sandy Spring Bancorp Inc. (NASDAQ:SASR), and Valhi, Inc. (NYSE:VHI) to gather more data points.

If you’d ask most shareholders, hedge funds are viewed as underperforming, old financial vehicles of years past. While there are more than an 8000 funds with their doors open today, Our researchers choose to focus on the top tier of this group, around 700 funds. Most estimates calculate that this group of people controls bulk of the smart money’s total capital, and by monitoring their first-class stock picks, Insider Monkey has unsheathed several investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, we’re going to take a look at the new action encompassing Interactive Intelligence Group Inc (NASDAQ:ININ).

How have hedgies been trading Interactive Intelligence Group Inc (NASDAQ:ININ)?

At the end of Q3, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 10% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Brian Bares’ Bares Capital Management has the biggest position in Interactive Intelligence Group Inc (NASDAQ:ININ), worth close to $90.3 million, accounting for 9% of its total 13F portfolio. The second largest stake is held by Michael Murphy and Daniel Donoghue of Discovery Group, with a $21.1 million position; 7.2% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions encompass Israel Englander’s Millennium Management, Renaissance Technologies, and Ken Griffin’s Citadel Investment Group.

Due to the fact that Interactive Intelligence Group Inc (NASDAQ:ININ) has witnessed a falling interest from the smart money, it’s safe to say that there exists a select few fund managers who were dropping their entire stakes heading into Q4. Intriguingly, Glenn Russell Dubin’s Highbridge Capital Management cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $1.9 million in stock. Nick Niell’s fund, Arrowgrass Capital Partners, also sold off its stock, about $1.4 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest fell by 1 fund heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Interactive Intelligence Group Inc (NASDAQ:ININ). These stocks are Sandy Spring Bancorp Inc. (NASDAQ:SASR), Valhi, Inc. (NYSE:VHI), and Windstream Holdings, Inc. (NASDAQ:WIN). This group of stocks’ market values are closest to Interactive Intelligence Group Inc (NASDAQ:ININ)’s market value.

As you can see, these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $122 million in Interactive Intelligence Group Inc (NASDAQ:ININ)’s case. Windstream Holdings, Inc. (NASDAQ:WIN) is the most popular stock in this table. On the other hand, Sandy Spring Bancorp Inc. (NASDAQ:SASR) is the least popular one with only 4 bullish hedge fund positions. Interactive Intelligence Group Inc (NASDAQ:ININ) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Windstream Holdings, Inc. (NASDAQ:WIN) might be a better candidate to consider a long position.