InnerWorkings, Inc. (INWK), LivePerson, Inc. (LPSN): Do Hedge Funds and Insiders Love RPX Corp (RPXC)?

RPX Corp (NASDAQ:RPXC) was in 11 hedge funds’ portfolio at the end of the fourth quarter of 2012. RPXC has experienced an increase in support from the world’s most elite money managers lately. There were 10 hedge funds in our database with RPXC positions at the end of the previous quarter.

To most market participants, hedge funds are assumed to be underperforming, outdated investment vehicles of years past. While there are more than 8000 funds in operation at the moment, we hone in on the leaders of this club, close to 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total capital, and by tracking their highest performing investments, we have uncovered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as integral, optimistic insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are a number of stimuli for an executive to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this strategy if piggybackers understand where to look (learn more here).

Now, let’s take a glance at the recent action surrounding RPX Corp (NASDAQ:RPXC).

How have hedgies been trading RPX Corp (NASDAQ:RPXC)?

Heading into 2013, a total of 11 of the hedge funds we track held long positions in this stock, a change of 10% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, Eric Bannasch’s Cadian Capital had the most valuable position in RPX Corp (NASDAQ:RPXC), worth close to $30 million, accounting for 1% of its total 13F portfolio. On Cadian Capital’s heels is Renaissance Technologies, managed by Jim Simons, which held a $2 million position; 0% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Paul Tudor Jones’s Tudor Investment Corp and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Now, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the most valuable position in RPX Corp (NASDAQ:RPXC). Two Sigma Advisors had 0 million invested in the company at the end of the quarter.

How have insiders been trading RPX Corp (NASDAQ:RPXC)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past half-year. Over the last six-month time period, RPX Corp (NASDAQ:RPXC) has experienced 1 unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to RPX Corp (NASDAQ:RPXC). These stocks are Team, Inc. (NYSE:TISI), InnerWorkings, Inc. (NASDAQ:INWK), LivePerson, Inc. (NASDAQ:LPSN), WNS (Holdings) Limited (ADR) (NYSE:WNS), and Insperity Inc (NYSE:NSP). This group of stocks are in the business services industry and their market caps are closest to RPXC’s market cap.

With the results shown by the aforementioned tactics, retail investors must always keep an eye on hedge fund and insider trading activity, and RPX Corp (NASDAQ:RPXC) applies perfectly to this mantra.

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