Is Active Network Inc (ACTV) Going to Burn These Hedge Funds?

Active Network Inc (NYSE:ACTV) has seen a decrease in hedge fund interest recently.

In the eyes of most traders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds trading today, we hone in on the moguls of this group, about 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by watching their highest performing investments, we have found a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as key, optimistic insider trading activity is another way to parse down the financial markets. As the old adage goes: there are a variety of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this strategy if shareholders understand where to look (learn more here).

Keeping this in mind, let’s take a glance at the key action surrounding Active Network Inc (NYSE:ACTV).

Hedge fund activity in Active Network Inc (NYSE:ACTV)

Heading into Q2, a total of 11 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Active Network Inc (NYSE:ACTV), worth close to $8 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by Lisa Rapuano of Lane Five Capital, with a $5.1 million position; 5.4% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Phil Frohlich’s Prescott Group Capital Management.

Since Active Network Inc (NYSE:ACTV) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds that elected to cut their full holdings last quarter. Interestingly, Bill Miller’s Legg Mason Capital Management dumped the biggest stake of all the hedgies we watch, totaling an estimated $1.7 million in stock., and Seymour Sy Kaufman and Michael Stark of Crosslink Capital was right behind this move, as the fund said goodbye to about $1 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Active Network Inc (NYSE:ACTV)?

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, Active Network Inc (NYSE:ACTV) has seen 2 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Active Network Inc (NYSE:ACTV). These stocks are Actuate Corporation (NASDAQ:BIRT), Guidance Software, Inc. (NASDAQ:GUID), RealNetworks Inc (NASDAQ:RNWK), Market Leader Inc (NASDAQ:LEDR), and Vringo, Inc. (NYSEAMEX:VRNG). This group of stocks are the members of the application software industry and their market caps resemble ACTV’s market cap.