Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Allot Communications Ltd. (NASDAQ:ALLT).
Allot Communications Ltd. (NASDAQ:ALLT) has experienced a decrease in support from the world’s most elite money managers recently. It may not come as a surprise, as the shares of Allot Communications Ltd. (NASDAQ:ALLT) lost 31.71% value during the quarter. In order to find out more about the hedge fund sentiment, we will cover hedgies that held positions in the company at the end of the last quarter.
At the end of this article, we will also compare Allot Communications Ltd. (NASDAQ:ALLT) to other stocks, including Emerge Energy Services LP (NYSE:EMES), Orion Marine Group, Inc. (NYSE:ORN), and UFP Technologies, Inc. (NASDAQ:UFPT) to get a better sense of its popularity.
Follow Allot Ltd. (NASDAQ:ALLT)
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To most market participants, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are more than 8000 funds in operation at present, We look at the aristocrats of this club, about 700 funds. It is estimated that this group of investors manages the lion’s share of all hedge funds’ total asset base, and by paying attention to their best equity investments, Insider Monkey has spotted a few investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, let’s go over the latest action regarding Allot Communications Ltd. (NASDAQ:ALLT).
How have hedgies been trading Allot Communications Ltd. (NASDAQ:ALLT)?
At the end of Q3, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 11% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Alyeska Investment Group, managed by Anand Parekh, holds the number one position in Allot Communications Ltd. (NASDAQ:ALLT). Alyeska Investment Group has a $10.4 million position in the stock, comprising 0.1% of its 13F portfolio. On Alyeska Investment Group’s heels is Mark N. Diker of Diker Management, with a $7.9 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions consist of Peter A. Wright’s P.A.W. CAPITAL PARTNERS, Brian Ashford-Russell and Tim Woolley’s Polar Capital, and Renaissance Technologies.
Because Allot Communications Ltd. (NASDAQ:ALLT) has experienced a declination in interest from hedge fund managers, it’s easy to see that there is a sect of funds that decided to sell off their positions entirely in the third quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, comprising about $0.3 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also sold off its stock, about $0.1 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 fund in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Allot Communications Ltd. (NASDAQ:ALLT) but similarly valued. We will take a look at Emerge Energy Services LP (NYSE:EMES), Orion Marine Group, Inc. (NYSE:ORN), UFP Technologies, Inc. (NASDAQ:UFPT), and Immunomedics, Inc. (NASDAQ:IMMU). All of these stocks’ market caps are similar to Allot Communications Ltd. (NASDAQ:ALLT)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EMES | 5 | 8021 | 1 |
| ORN | 12 | 15012 | 0 |
| UFPT | 7 | 35019 | 1 |
| IMMU | 5 | 10681 | -4 |
As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $27 million in Allot Communications Ltd. (NASDAQ:ALLT)’s case. Orion Marine Group, Inc. (NYSE:ORN) is the most popular stock in this table. On the other hand, Emerge Energy Services LP (NYSE:EMES) is the least popular one with only 5 bullish hedge fund positions. Allot Communications Ltd. (NASDAQ:ALLT) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Orion Marine Group, Inc. (NYSE:ORN) might be a better candidate to consider a long position.
