Hedge Funds Are Selling Actuate Corporation (BIRT)

Actuate Corporation (NASDAQ:BIRT) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately.

To most stock holders, hedge funds are seen as underperforming, old financial tools of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey look at the elite of this group, around 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by watching their highest performing stock picks, we have identified a few investment strategies that have historically outstripped Mr. Market. 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as integral, bullish insider trading activity is a second way to parse down the marketplace. Obviously, there are plenty of incentives for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).

Keeping this in mind, let’s take a look at the latest action surrounding Actuate Corporation (NASDAQ:BIRT).

What have hedge funds been doing with Actuate Corporation (NASDAQ:BIRT)?

Heading into Q2, a total of 11 of the hedge funds we track held long positions in this stock, a change of -31% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Actuate Corporation (NASDAQ:BIRT), worth close to $9.8 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $8.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Jason F. Harris’s Kendall Square Capital, Cliff Asness’s AQR Capital Management and George Soros’s Soros Fund Management.

Judging by the fact that Actuate Corporation (NASDAQ:BIRT) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers who sold off their positions entirely heading into Q2. At the top of the heap, Mark N. Diker’s Diker Management dropped the biggest position of the 450+ funds we monitor, valued at close to $3.2 million in stock.. Robert B. Gillam’s fund, McKinley Capital Management, also dropped its stock, about $2.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds heading into Q2.

What have insiders been doing with Actuate Corporation (NASDAQ:BIRT)?

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 frame, Actuate Corporation (NASDAQ:BIRT) has seen zero unique insiders purchasing, 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 Actuate Corporation (NASDAQ:BIRT). These stocks are Active Network Inc (NYSE:ACTV), Vringo, Inc. (NYSEAMEX:VRNG), DTS Inc. (NASDAQ:DTSI), RealNetworks Inc (NASDAQ:RNWK), and Guidance Software, Inc. (NASDAQ:GUID). This group of stocks belong to the application software industry and their market caps match BIRT’s market cap.