Red Hat, Inc. (RHT) Investors: A Breakdown Of The Shorts

To the untrained eye, there are a multitude of facts and figures for Red Hat, Inc. (NYSE:RHT) traders to watch, but it’s smart to take note of a stock’s short sellers. A couple indicators typically used are: (a) the percentage of a stock’s float that short sellers are presently selling, plus (b) the change in short selling activity.

Heightened short selling typically indicates what it implies: the Street has become less bullish on the stock. Overselling, however, sometimes has a bullish effect on share price, as short-ers can be forced to buy their shares.

At Insider Monkey, it is not a secret that we watch the smart money’s interest, but it is eqaully as crucial to group this data with overall short data. In certain instances, large investors might disclose that they’re short on a company, but it’s not an SEC requirement. Nonetheless, many individual investors may want to stay away from highly shorted stocks with elevated hedge fund investment, while others may desire short-squeeze opportunities. For investors looking for a market-beating piggybacking strategy, discover the details of our premium strategy.

Without further ado, let’s take a glance at the latest data surrounding Red Hat, Inc. (NYSE:RHT).

Looking at the newest FINRA data, which is released two times every month, we can discover that Red Hat, Inc. (NYSE:RHT) has a short interest of 3.20% of float. With a float of 190.02M shares, this represents a short ratio of 2.10.

It’s also important to take note of hedge fund holdings via their 13F filings. When analyzing the funds we track, Brett Barakett’s Tremblant Capital had the largest call position in Red Hat, Inc. (NYSE:RHT), worth close to $124.7 million, comprising 5.9% of its total 13F portfolio. The 2nd biggest stake is held by Alkeon Capital Management, managed by Panayotis Takis Sparaggis, which held a $114.2 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Joe DiMenna’s ZWEIG DIMENNA PARTNERS.

Also, insider buying is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Red Hat, Inc. (NYSE:RHT) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also take a look at activity in other stocks similar to Red Hat, Inc. (NYSE:RHT). These stocks are BMC Software, Inc. (NASDAQ:BMC), F5 Networks, Inc. (NASDAQ:FFIV), CA, Inc. (NASDAQ:CA), Catamaran Corp (USA) (NASDAQ:CTRX), and Workday Inc (NYSE:WDAY). All of these stocks are in the application software industry and their market caps are closest to RHT’s market cap.

These three tools–short sale information, hedge fund data and insider sentiment–are what all investors should track. Although it’s difficult to discover a practical strategy from short selling information, hedgie and insider sentiment give plenty of market beating opportunities if you know where to look.