Should You Buy Vocera Communications Inc (VCRA)?

Vocera Communications Inc (NYSE:VCRA) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. VCRA has experienced an increase in activity from the world’s largest hedge funds lately. There were 9 hedge funds in our database with VCRA holdings at the end of the previous quarter.

In the financial world, there are a multitude of methods shareholders can use to watch Mr. Market. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can trounce their index-focused peers by a solid amount (see just how much).

Just as important, bullish insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are lots of stimuli for an insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this strategy if shareholders understand where to look (learn more here).

Now, let’s take a gander at the recent action encompassing Vocera Communications Inc (NYSE:VCRA).

How are hedge funds trading Vocera Communications Inc (NYSE:VCRA)?

At Q1’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of 56% from the first quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings meaningfully.

According to our comprehensive database, Senator Investment Group, managed by Doug Silverman and Alexander Klabin, holds the biggest position in Vocera Communications Inc (NYSE:VCRA). Senator Investment Group has a $113.6 million call position in the stock, comprising 1.3% of its 13F portfolio. Sitting at the No. 2 spot is Samuel Isaly of OrbiMed Advisors, with a $16 million position; 0.4% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Brian Ashford-Russell and Tim Woolley’s Polar Capital, SAC Subsidiary’s CR Intrinsic Investors and Daniel Arbess’s Xerion.

Now, key hedge funds have been driving this bullishness. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, initiated the most valuable call position in Vocera Communications Inc (NYSE:VCRA). Senator Investment Group had 113.6 million invested in the company at the end of the quarter. SAC Subsidiary’s CR Intrinsic Investors also made a $6.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Daniel Arbess’s Xerion, Mike Vranos’s Ellington, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Insider trading activity in Vocera Communications Inc (NYSE:VCRA)

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time period, Vocera Communications Inc (NYSE:VCRA) has seen zero unique insiders buying, and 12 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Vocera Communications Inc (NYSE:VCRA). These stocks are Comtech Telecomm. Corp. (NASDAQ:CMTL), Tellabs, Inc. (NASDAQ:TLAB), Sonus Networks, Inc. (NASDAQ:SONS), Harmonic Inc (NASDAQ:HLIT), and 8×8, Inc. (NASDAQ:EGHT). This group of stocks belong to the communication equipment industry and their market caps resemble VCRA’s market cap.