This Metric Says You Are Smart to Buy Digi International Inc. (DGII)

Digi International Inc. (NASDAQ:DGII) was in 7 hedge funds’ portfolio at the end of December. DGII has experienced an increase in support from the world’s most elite money managers recently. There were 6 hedge funds in our database with DGII positions at the end of the previous quarter.

To the average investor, there are many indicators investors can use to analyze publicly traded companies. A duo of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can outclass their index-focused peers by a very impressive amount (see just how much).

Just as integral, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. Just as you’d expect, there are plenty of reasons for an insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this method if shareholders understand what to do (learn more here).

Consequently, let’s take a glance at the latest action encompassing Digi International Inc. (NASDAQ:DGII).

What have hedge funds been doing with Digi International Inc. (NASDAQ:DGII)?

At year’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of 17% from the previous quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Digi International Inc. (NASDAQ:DGII). Royce & Associates has a $12.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is John Overdeck and David Siegel of Two Sigma Advisors, with a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.

As aggregate interest increased, specific money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, assembled the biggest position in Digi International Inc. (NASDAQ:DGII). Millennium Management had 0.7 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.1 million investment in the stock during the quarter.

How are insiders trading Digi International Inc. (NASDAQ:DGII)?

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time period, Digi International Inc. (NASDAQ:DGII) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Digi International Inc. (NASDAQ:DGII). These stocks are Super Micro Computer, Inc. (NASDAQ:SMCI), Black Box Corporation (NASDAQ:BBOX), Extreme Networks, Inc (NASDAQ:EXTR), Globecomm Systems, Inc. (NASDAQ:GCOM), and Silicom Ltd. (NASDAQ:SILC). All of these stocks are in the networking & communication devices industry and their market caps resemble DGII’s market cap.

With the results exhibited by the aforementioned studies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Digi International Inc. (NASDAQ:DGII) applies perfectly to this mantra.

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