To most traders, hedge funds are viewed as underperforming, old investment vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey look at the top tier of this club, about 450 funds. It is widely believed that this group oversees most of all hedge funds’ total capital, and by monitoring their best stock picks, we have come up with a few investment strategies that have historically outstripped Mr. Market. 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 topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as integral, positive insider trading activity is a second way to parse down the marketplace. There are plenty of stimuli for a bullish insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this method if you understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the recent action encompassing Callidus Software Inc. (NASDAQ:CALD).
How are hedge funds trading Callidus Software Inc. (NASDAQ:CALD)?
In preparation for this year, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Julian Robertson’s Tiger Management had the biggest position in Callidus Software Inc. (NASDAQ:CALD), worth close to $3.4 million, comprising 0.6% of its total 13F portfolio. The second largest stake is held by Cannell Capital, managed by J. Carlo Cannell, which held a $3.2 million position; 2.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Phil Frohlich’s Prescott Group Capital Management, John Zaro’s Bourgeon Capital and Ian P. Murray’s Lanexa Global Management.
Due to the fact that Callidus Software Inc. (NASDAQ:CALD) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedge funds who were dropping their entire stakes last quarter. It’s worth mentioning that Richard Schimel’s Diamondback Capital dropped the biggest stake of the 450+ funds we key on, valued at close to $2 million in call options These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
Insider trading activity in Callidus Software Inc. (NASDAQ:CALD)
Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time frame, Callidus Software Inc. (NASDAQ:CALD) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Callidus Software Inc. (NASDAQ:CALD). These stocks are Procera Networks, Inc. (NASDAQ:PKT), Saba Software, Inc. (NASDAQ:SABA), Velti Plc (NASDAQ:VELT) and Sapiens International Corporation N.V. (NASDAQ:SPNS). This group of stocks belong to the business software & services industry and their market caps are closest to CALD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Procera Networks, Inc. (NASDAQ:PKT) | 11 | 0 | 2 |
| Saba Software, Inc. (NASDAQ:SABA) | 7 | 0 | 0 |
| Velti Plc (NASDAQ:VELT) | 8 | 0 | 0 |
| Sapiens International Corporation N.V. (NASDAQ:SPNS) | 1 | 0 | 0 |
With the results exhibited by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Callidus Software Inc. (NASDAQ:CALD) shareholders fit into this picture quite nicely.
