Hedge Funds Aren’t Crazy About Insight Enterprises, Inc. (NSIT) Anymore

Is Insight Enterprises, Inc. (NASDAQ:NSIT) a safe investment now? Hedge funds are taking a bearish view. The number of bullish hedge fund positions shrunk by 3 lately.

According to most traders, hedge funds are perceived as worthless, outdated investment vehicles of years past. While there are greater than 8000 funds trading today, we at Insider Monkey look at the crème de la crème of this group, around 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by monitoring their highest performing picks, we have determined a number of investment strategies that have historically outperformed the market. 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as beneficial, bullish insider trading activity is another way to parse down the stock market universe. There are a variety of motivations for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the recent action encompassing Insight Enterprises, Inc. (NASDAQ:NSIT).

How are hedge funds trading Insight Enterprises, Inc. (NASDAQ:NSIT)?

In preparation for this quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of -23% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully.

Of the funds we track, Pzena Investment Management, managed by Richard S. Pzena, holds the most valuable position in Insight Enterprises, Inc. (NASDAQ:NSIT). Pzena Investment Management has a $32.7 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $15.6 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Geoffrey Raynor’s Q Investments (Specter Holdings), Ken Griffin’s Citadel Investment Group and Andy Redleaf’s Whitebox Advisors.

Judging by the fact that Insight Enterprises, Inc. (NASDAQ:NSIT) has experienced declining sentiment from the smart money, it’s safe to say that there exists a select few hedge funds that decided to sell off their full holdings in Q1. It’s worth mentioning that Joel Greenblatt’s Gotham Asset Management said goodbye to the biggest investment of the 450+ funds we key on, valued at about $2.3 million in stock.. Neil Chriss’s fund, Hutchin Hill Capital, also sold off its stock, about $0.3 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds in Q1.

What do corporate executives and insiders think about Insight Enterprises, Inc. (NASDAQ:NSIT)?

Insider buying is best served when the company in question has experienced transactions within the past half-year. Over the latest half-year time frame, Insight Enterprises, Inc. (NASDAQ:NSIT) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

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