Is Digital Generation Inc (NASDAQ:DGIT) worth your attention right now? Prominent investors are taking an optimistic view. The number of long hedge fund positions increased by 2 lately.
According to most shareholders, hedge funds are viewed as unimportant, outdated investment tools of the past. While there are over 8000 funds in operation today, we hone in on the aristocrats of this group, about 450 funds. It is estimated that this group controls the majority of all hedge funds’ total asset base, and by paying attention to their highest performing equity investments, we have revealed a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, bullish insider trading sentiment is a second way to parse down the world of equities. There are many stimuli for an executive to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this method if shareholders know what to do (learn more here).
Now, let’s take a peek at the latest action encompassing Digital Generation Inc (NASDAQ:DGIT).
How have hedgies been trading Digital Generation Inc (NASDAQ:DGIT)?
At Q1’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 18% from the previous quarter. 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, Anthion Management, managed by David Moradi, holds the most valuable position in Digital Generation Inc (NASDAQ:DGIT). Anthion Management has a $8.2 million position in the stock, comprising 3% of its 13F portfolio. Sitting at the No. 2 spot is Roumell Asset Management, managed by Jim Roumell, which held a $6.7 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Brett Hendrickson’s Nokomis Capital, Jon Bauer’s Contrarian Capital and Jim Simons’s Renaissance Technologies.
As one would reasonably expect, some big names were leading the bulls’ herd. Nokomis Capital, managed by Brett Hendrickson, established the largest position in Digital Generation Inc (NASDAQ:DGIT). Nokomis Capital had 4.7 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $1.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, Warren Lichtenstein’s Steel Partners, and Mike Vranos’s Ellington.
What have insiders been doing with Digital Generation Inc (NASDAQ:DGIT)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past six months. Over the last half-year time period, Digital Generation Inc (NASDAQ:DGIT) has seen 4 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Digital Generation Inc (NASDAQ:DGIT). These stocks are Swisher Hygiene, Inc. (NASDAQ:SWSH), Limelight Networks, Inc. (NASDAQ:LLNW), Acquity Group Ltd (NYSEAMEX:AQ), PRGX Global Inc (NASDAQ:PRGX), and Reis Inc (NASDAQ:REIS). This group of stocks are in the business services industry and their market caps resemble DGIT’s market cap.
