This Metric Says You Are Smart to Buy TW Telecom Inc (TWTC)

Is TW Telecom Inc (NASDAQ:TWTC) going to take off soon? Money managers are in a bullish mood. The number of bullish hedge fund positions increased by 3 lately.

In the 21st century investor’s toolkit, there are dozens of metrics shareholders can use to monitor stocks. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat their index-focused peers by a superb amount (see just how much).

Just as key, positive insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are a number of stimuli for an insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if you know where to look (learn more here).

Keeping this in mind, we’re going to take a gander at the recent action regarding TW Telecom Inc (NASDAQ:TWTC).

Hedge fund activity in TW Telecom Inc (NASDAQ:TWTC)

In preparation for this quarter, a total of 30 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 an “upper tier” of key hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Mason Hawkins’s Southeastern Asset Management had the biggest position in TW Telecom Inc (NASDAQ:TWTC), worth close to $296.8 million, comprising 1.3% of its total 13F portfolio. On Southeastern Asset Management’s heels is Renaissance Technologies, managed by Jim Simons, which held a $117.7 million position; 0.3% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Doug Silverman and Alexander Klabin’s Senator Investment Group, Keith Meister’s Corvex Capital and Nick Niell’s Arrowgrass Capital Partners.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. TriOaks Capital Management, managed by Jeffrey Jon Berney, assembled the most outsized position in TW Telecom Inc (NASDAQ:TWTC). TriOaks Capital Management had 7.9 million invested in the company at the end of the quarter. Douglas Hirsch’s Seneca Capital also initiated a $7.6 million position during the quarter. The other funds with brand new TWTC positions are Larry Foley and Paul Farrell’s Bronson Point Partners, Matthew Tewksbury’s Stevens Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

What have insiders been doing with TW Telecom Inc (NASDAQ:TWTC)?

Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past half-year. Over the last half-year time period, TW Telecom Inc (NASDAQ:TWTC) has seen zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to TW Telecom Inc (NASDAQ:TWTC). These stocks are CenturyLink, Inc. (NYSE:CTL), Consolidated Communications Holdings Inc (NASDAQ:CNSL), Atlantic Tele-Network, Inc. (NASDAQ:ATNI), Windstream Corporation (NASDAQ:WIN), and Frontier Communications Corp (NASDAQ:FTR). All of these stocks are in the telecom services – domestic industry and their market caps are similar to TWTC’s market cap.