Hedge Funds Are Betting On Mentor Graphics Corp (MENT)

Mentor Graphics Corp (NASDAQ:MENT) was in 18 hedge funds’ portfolio at the end of the first quarter of 2013. MENT shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 17 hedge funds in our database with MENT positions at the end of the previous quarter.

At the moment, there are plenty of metrics market participants can use to monitor stocks. A couple of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outclass the broader indices by a superb amount (see just how much).

Just as integral, optimistic insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are many reasons for an executive to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this method if “monkeys” know what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the recent action surrounding Mentor Graphics Corp (NASDAQ:MENT).

What have hedge funds been doing with Mentor Graphics Corp (NASDAQ:MENT)?

In preparation for this quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 6% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, Icahn Capital LP, managed by Carl Icahn, holds the largest position in Mentor Graphics Corp (NASDAQ:MENT). Icahn Capital LP has a $291 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Private Capital Management, managed by Gregg J. Powers, which held a $37.1 million position; the fund has 3.6% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Ken Fisher’s Fisher Asset Management, David Dreman’s Dreman Value Management and Andrew Sandler’s Sandler Capital Management.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Hutchin Hill Capital, managed by Neil Chriss, assembled the most valuable position in Mentor Graphics Corp (NASDAQ:MENT). Hutchin Hill Capital had 3.1 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $2.2 million investment in the stock during the quarter. The other funds with brand new MENT positions are Glenn Russell Dubin’s Highbridge Capital Management and Mark A. Nordlicht’s Platinum Management.

What do corporate executives and insiders think about Mentor Graphics Corp (NASDAQ:MENT)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, Mentor Graphics Corp (NASDAQ:MENT) has experienced zero unique insiders buying, and 6 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 Mentor Graphics Corp (NASDAQ:MENT). These stocks are National Instruments Corp (NASDAQ:NATI), Concur Technologies, Inc. (NASDAQ:CNQR), PTC Inc (NASDAQ:PMTC), Tyler Technologies, Inc. (NYSE:TYL), and ACI Worldwide Inc (NASDAQ:ACIW). This group of stocks are the members of the technical & system software industry and their market caps resemble MENT’s market cap.

With the results exhibited by the aforementioned studies, everyday investors should always watch hedge fund and insider trading activity, and Mentor Graphics Corp (NASDAQ:MENT) shareholders fit into this picture quite nicely.

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