Juniper Networks, Inc. (JNPR): Are Hedge Funds Right About This Stock?

Juniper Networks, Inc. (NYSE:JNPR) was in 28 hedge funds’ portfolio at the end of March. JNPR shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 33 hedge funds in our database with JNPR holdings at the end of the previous quarter.

According to most market participants, hedge funds are viewed as slow, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey choose to focus on the upper echelon of this group, around 450 funds. It is estimated that this group has its hands on most of the smart money’s total asset base, and by tracking their best equity investments, we have identified a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Equally as important, positive insider trading sentiment is another way to parse down the world of equities. There are lots of reasons for an insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).

Consequently, we’re going to take a look at the recent action encompassing Juniper Networks, Inc. (NYSE:JNPR).

What have hedge funds been doing with Juniper Networks, Inc. (NYSE:JNPR)?

At Q1’s end, a total of 28 of the hedge funds we track were bullish in this stock, a change of -15% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Diamond Hill Capital, managed by Ric Dillon, holds the biggest position in Juniper Networks, Inc. (NYSE:JNPR). Diamond Hill Capital has a $89.9 million position in the stock, comprising 0.9% of its 13F portfolio. The second largest stake is held by Highbridge Capital Management, managed by Glenn Russell Dubin, which held a $71.1 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group and Ray Dalio’s Bridgewater Associates.

Due to the fact that Juniper Networks, Inc. (NYSE:JNPR) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedgies that elected to cut their entire stakes in Q1. Interestingly, Daniel Benton’s Andor Capital Management said goodbye to the biggest stake of the 450+ funds we track, worth close to $39.3 million in stock.. Ryan Frick and Oliver Evans’s fund, Dorsal Capital Management, also dumped its stock, about $32.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds in Q1.

What have insiders been doing with Juniper Networks, Inc. (NYSE:JNPR)?

Insider purchases made by high-level executives is best served when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Juniper Networks, Inc. (NYSE:JNPR) has seen 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Juniper Networks, Inc. (NYSE:JNPR). These stocks are Cisco Systems, Inc. (NASDAQ:CSCO), Finisar Corporation (NASDAQ:FNSR), Riverbed Technology, Inc. (NASDAQ:RVBD), Aruba Networks, Inc. (NASDAQ:ARUN), and Palo Alto Networks Inc (NYSE:PANW). All of these stocks are in the networking & communication devices industry and their market caps resemble JNPR’s market cap.