Hedge Funds Are Dumping Lifelock Inc (LOCK)

Is Lifelock Inc (NYSE:LOCK) undervalued? The best stock pickers are selling. The number of long hedge fund positions decreased by 1 lately.

To most shareholders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the masters of this club, around 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total capital, and by paying attention to their highest performing picks, we have revealed a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as integral, positive insider trading activity is a second way to parse down the world of equities. Obviously, there are many motivations for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).

Keeping this in mind, let’s take a gander at the key action encompassing Lifelock Inc (NYSE:LOCK).

What have hedge funds been doing with Lifelock Inc (NYSE:LOCK)?

At Q1’s end, a total of 9 of the hedge funds we track were long in this stock, a change of -10% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, TriOaks Capital Management, managed by Jeffrey Jon Berney, holds the most valuable position in Lifelock Inc (NYSE:LOCK). TriOaks Capital Management has a $12.9 million position in the stock, comprising 1.8% of its 13F portfolio. The second largest stake is held by Joseph A. Jolson of Harvest Capital Strategies, with a $3 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Brian Taylor’s Pine River Capital Management, Anand Parekh’s Alyeska Investment Group and Israel Englander’s Millennium Management.

Because Lifelock Inc (NYSE:LOCK) has faced declining sentiment from the smart money, logic holds that there is a sect of fund managers that slashed their entire stakes heading into Q2. Interestingly, Scott McLellan’s Marble Arch Investments said goodbye to the biggest position of the 450+ funds we track, valued at close to $4.9 million in stock., and John Fichthorn of Dialectic Capital Management was right behind this move, as the fund dumped about $1.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q2.

What do corporate executives and insiders think about Lifelock Inc (NYSE:LOCK)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the last six-month time period, Lifelock Inc (NYSE:LOCK) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Lifelock Inc (NYSE:LOCK). These stocks are AVG Technologies NV (NYSE:AVG), Insight Enterprises, Inc. (NASDAQ:NSIT), Demandware Inc (NYSE:DWRE), Monotype Imaging Holdings Inc. (NASDAQ:TYPE), and FleetMatics Group PLC (NYSE:FLTX). This group of stocks belong to the application software industry and their market caps are closest to LOCK’s market cap.