Should You Avoid Aspen Technology, Inc. (AZPN)?

Is Aspen Technology, Inc. (NASDAQ:AZPN) a good investment?

In the 21st century investor’s toolkit, there are a multitude of gauges investors can use to track publicly traded companies. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top fund managers can outperform their index-focused peers by a very impressive margin (see just how much).

Equally as useful, optimistic insider trading sentiment is a second way to analyze the financial markets. Just as you’d expect, there are lots of incentives for an executive to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).

Thus, let’s discuss the newest info about Aspen Technology, Inc. (NASDAQ:AZPN).

How are hedge funds trading Aspen Technology, Inc. (NASDAQ:AZPN)?

At Q2’s end, a total of 17 of the hedge funds we track were long in this stock, a change of -11% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially.

According to our 13F database, Alkeon Capital Management, managed by Panayotis Sparaggis, holds the largest position in Aspen Technology, Inc. (NASDAQ:AZPN). Alkeon Capital Management has a $75.4 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $19.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include D. E. Shaw’s D E Shaw, Andrew Sandler’s Sandler Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Due to the fact Aspen Technology, Inc. (NASDAQ:AZPN) has experienced bearish sentiment from upper-tier hedge fund managers, logic holds that there lies a certain “tier” of hedge funds that slashed their positions entirely in Q1. At the top of the heap, Richard Driehaus’s Driehaus Capital dumped the biggest position of the 450+ funds we watch, worth an estimated $1.4 million in stock. Van Schreiber’s fund, Bennett Lawrence Management, also said goodbye to its stock, about $1.2 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds in Q1.

How have insiders been trading Aspen Technology, Inc. (NASDAQ:AZPN)?

Insider buying made by high-level executives is most useful when the company in focus has experienced transactions within the past 180 days. Over the last six-month time frame, Aspen Technology, Inc. (NASDAQ:AZPN) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Aspen Technology, Inc. (NASDAQ:AZPN). These stocks are Solera Holdings Inc (NYSE:SLH), Jack Henry & Associates, Inc. (NASDAQ:JKHY), SS and C Technologies Holdings Inc (NASDAQ:SSNC), Informatica Corporation (NASDAQ:INFA), and Tibco Software Inc. (NASDAQ:TIBX). This group of stocks are the members of the business software & services industry and their market caps match AZPN’s market cap.

Using the results shown by the previously mentioned research, average investors should always track hedge fund and insider trading activity, and Aspen Technology, Inc. (NASDAQ:AZPN) shareholders fit into this picture quite nicely.

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