Here is What Hedge Funds Think About Callidus Software Inc. (CALD)

The third quarter was a rough one for most investors, as fears of an interest rate hike in the U.S, a weakening economy in China, and a stagnant Europe, weighed heavily on the minds of investors. Both the S&P 500 and Russell 2000 sank as a result, with the Russell 2000, which is composed of smaller companies, being hit especially hard. This was primarily due to hedge funds, which are big supporters of small-cap stocks, pulling some of their capital out of the volatile markets during this time. Let’s look at how this market volatility affected the sentiment of hedge funds towards Callidus Software Inc. (NASDAQ:CALD), and what that likely means for the prospects of the company and its stock.

Callidus Software Inc. (NASDAQ:CALD) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article we will also compare CALD to other stocks including Cabot Microelectronics Corporation (NASDAQ:CCMP), Fifth Street Finance Corp. (NASDAQ:FSC), and Amerisafe, Inc. (NASDAQ:AMSF) to get a better sense of its popularity.

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With all of this in mind, we’re going to take a peek at the new action regarding Callidus Software Inc. (NASDAQ:CALD).

How have hedgies been trading Callidus Software Inc. (NASDAQ:CALD)?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Callidus Software Inc. (NASDAQ:CALD). Renaissance Technologies has an $39.8 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is RGM Capital, managed by Robert G. Moses, which holds an $38.5 million position; the fund has 5.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain George McCabe’s Portolan Capital Management, Brandon Osten’s Venator Capital Management and Richard Driehaus’s Driehaus Capital.
Intriguingly, Phil Frohlich’s Prescott Group Capital Management said goodbye to the largest investment of the 700 funds tracked by Insider Monkey, totaling an estimated $6.2 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $4.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Callidus Software Inc. (NASDAQ:CALD) but similarly valued. These stocks are Cabot Microelectronics Corporation (NASDAQ:CCMP), Fifth Street Finance Corp. (NASDAQ:FSC), Amerisafe, Inc. (NASDAQ:AMSF), and Greenbrier Companies Inc (NYSE:GBX). All of these stocks’ market caps are closest to CALD’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $153 million in CALD’s case. Cabot Microelectronics Corporation (NASDAQ:CCMP) is the most popular stock in this table. On the other hand Fifth Street Finance Corp. (NASDAQ:FSC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Callidus Software Inc. (NASDAQ:CALD) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.