This Metric Says You Are Smart to Buy Cornerstone OnDemand, Inc. (CSOD)

Cornerstone OnDemand, Inc. (NASDAQ:CSOD) investors should pay attention to an increase in hedge fund sentiment in recent months.

In the financial world, there are plenty of indicators shareholders can use to track stocks. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite investment managers can outperform their index-focused peers by a healthy amount (see just how much).

Just as key, positive insider trading sentiment is a second way to break down the financial markets. There are lots of motivations for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if piggybackers know where to look (learn more here).

With these “truths” under our belt, we’re going to take a gander at the recent action regarding Cornerstone OnDemand, Inc. (NASDAQ:CSOD).

How have hedgies been trading Cornerstone OnDemand, Inc. (NASDAQ:CSOD)?

At the end of the first quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 36% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings considerably.

Of the funds we track, Donald Chiboucis’s Columbus Circle Investors had the most valuable position in Cornerstone OnDemand, Inc. (NASDAQ:CSOD), worth close to $19.2 million, comprising 0.1% of its total 13F portfolio. On Columbus Circle Investors’s heels is Andor Capital Management, managed by Daniel Benton, which held a $14.5 million position; 1.8% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Richard Driehaus’s Driehaus Capital, SAC Subsidiary’s CR Intrinsic Investors and Scott Fine and Peter Richards’s Empire Capital Management.

Now, key money managers were leading the bulls’ herd. Sigma Capital Management, managed by SAC Subsidiary, created the largest position in Cornerstone OnDemand, Inc. (NASDAQ:CSOD). Sigma Capital Management had 3.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1.9 million position during the quarter. The following funds were also among the new CSOD investors: Jim Simons’s Renaissance Technologies, Mike Vranos’s Ellington, and Dmitry Balyasny’s Balyasny Asset Management.

What have insiders been doing with Cornerstone OnDemand, Inc. (NASDAQ:CSOD)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time period, Cornerstone OnDemand, Inc. (NASDAQ:CSOD) has experienced zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Cornerstone OnDemand, Inc. (NASDAQ:CSOD). These stocks are Shanda Games Limited(ADR) (NASDAQ:GAME), Konami Corp (ADR) (NYSE:KNM), Rovi Corporation (NASDAQ:ROVI), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and Changyou.Com Ltd (ADR) (NASDAQ:CYOU). This group of stocks belong to the multimedia & graphics software industry and their market caps are closest to CSOD’s market cap.