Is Accelrys, Inc. (ACCL) Going to Burn These Hedge Funds?

Is Accelrys, Inc. (NASDAQ:ACCL) worth your attention right now? The smart money is taking an optimistic view. The number of bullish hedge fund positions increased by 1 lately.

In the eyes of most market participants, hedge funds are viewed as underperforming, old investment vehicles of yesteryear. While there are over 8000 funds in operation at present, we choose to focus on the upper echelon of this club, about 450 funds. It is estimated that this group controls the majority of all hedge funds’ total capital, and by paying attention to their best stock picks, we have identified a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as beneficial, optimistic insider trading sentiment is another way to parse down the stock market universe. Obviously, there are a variety of stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this strategy if “monkeys” know where to look (learn more here).

Now, let’s take a look at the key action encompassing Accelrys, Inc. (NASDAQ:ACCL).

How have hedgies been trading Accelrys, Inc. (NASDAQ:ACCL)?

At Q1’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of 13% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully.

When looking at the hedgies we track, Douglas T. Granat’s Trigran Investments had the biggest position in Accelrys, Inc. (NASDAQ:ACCL), worth close to $21.1 million, comprising 10.8% of its total 13F portfolio. Sitting at the No. 2 spot is Park West Asset Management, managed by Peter S. Park, which held a $11.1 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Ken Griffin’s Citadel Investment Group.

With a general bullishness amongst the heavyweights, key money managers have jumped into Accelrys, Inc. (NASDAQ:ACCL) headfirst. D E Shaw, managed by D. E. Shaw, assembled the most outsized position in Accelrys, Inc. (NASDAQ:ACCL). D E Shaw had 0.2 million invested in the company at the end of the quarter.

Insider trading activity in Accelrys, Inc. (NASDAQ:ACCL)

Insider buying is most useful when the company in question has seen transactions within the past six months. Over the last six-month time period, Accelrys, Inc. (NASDAQ:ACCL) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Accelrys, Inc. (NASDAQ:ACCL). These stocks are E2open Inc (NASDAQ:EOPN), AutoNavi Holdings Ltd (ADR) (NASDAQ:AMAP), Proofpoint Inc (NASDAQ:PFPT), Bazaarvoice Inc (NASDAQ:BV), and SciQuest, Inc. (NASDAQ:SQI). This group of stocks belong to the application software industry and their market caps match ACCL’s market cap.