Here is What Hedge Funds Think About Vocus, Inc. (VOCS)

Is Vocus, Inc. (NASDAQ:VOCS) the right pick for your portfolio? Hedge funds are becoming hopeful. The number of long hedge fund bets went up by 5 lately.

According to most investors, hedge funds are perceived as slow, outdated investment vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the upper echelon of this group, close to 450 funds. It is widely believed that this group controls the majority of the smart money’s total asset base, and by paying attention to their top equity investments, we have come up with a few 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 per annum for a decade in our back tests, and since we’ve started 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 (see the details here).

Equally as beneficial, bullish insider trading activity is another way to parse down the stock market universe. Obviously, there are lots of reasons for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).

Now, it’s important to take a look at the key action regarding Vocus, Inc. (NASDAQ:VOCS).

How are hedge funds trading Vocus, Inc. (NASDAQ:VOCS)?

In preparation for this quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of 71% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, John Murphy’s Alydar Capital had the biggest position in Vocus, Inc. (NASDAQ:VOCS), worth close to $5.4 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Mark N. Diker of Diker Management, with a $4.2 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Glenn Russell Dubin’s Highbridge Capital Management, Israel Englander’s Millennium Management and Joseph A. Jolson’s Harvest Capital Strategies.

As one would reasonably expect, specific money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the largest position in Vocus, Inc. (NASDAQ:VOCS). Millennium Management had 3 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new VOCS investors: Brian Taylor’s Pine River Capital Management, Ken Griffin’s Citadel Investment Group, and Matthew Hulsizer’s PEAK6 Capital Management.

What do corporate executives and insiders think about Vocus, Inc. (NASDAQ:VOCS)?

Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time period, Vocus, Inc. (NASDAQ:VOCS) has experienced 3 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Vocus, Inc. (NASDAQ:VOCS). These stocks are Digital River, Inc. (NASDAQ:DRIV), Support.com, Inc. (NASDAQ:SPRT), Keynote Systems, Inc. (NASDAQ:KEYN), ClickSoftware Technologies Ltd. (NASDAQ:CKSW), and QuinStreet Inc (NASDAQ:QNST). This group of stocks belong to the internet software & services industry and their market caps are closest to VOCS’s market cap.

With the returns shown by the aforementioned research, retail investors should always monitor hedge fund and insider trading activity, and Vocus, Inc. (NASDAQ:VOCS) is an important part of this process.

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