If you’d ask most shareholders, hedge funds are viewed as underperforming, old investment tools of years past. While there are over 8000 funds with their doors open at present, we look at the bigwigs of this group, around 450 funds. It is widely believed that this group oversees the majority of the smart money’s total asset base, and by watching their highest performing stock picks, we have determined a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as important, positive insider trading activity is a second way to parse down the stock market universe. Obviously, there are a variety of motivations for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Keeping this in mind, let’s take a gander at the latest action encompassing Avid Technology, Inc. (NASDAQ:AVID).
Hedge fund activity in Avid Technology, Inc. (NASDAQ:AVID)
Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of -8% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, Richard Blum’s Blum Capital Partners had the biggest position in Avid Technology, Inc. (NASDAQ:AVID), worth close to $44.7 million, comprising 6.8% of its total 13F portfolio. On Blum Capital Partners’s heels is Private Capital Management, managed by Gregg J. Powers, which held a $11.5 million position; 1.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Kelly Cardwell’s Central Square Management, Chuck Royce’s Royce & Associates and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Judging by the fact that Avid Technology, Inc. (NASDAQ:AVID) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedge funds who were dropping their positions entirely at the end of the first quarter. Interestingly, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors sold off the largest position of all the hedgies we key on, comprising an estimated $0.6 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund cut about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 1 funds at the end of the first quarter.
How are insiders trading Avid Technology, Inc. (NASDAQ:AVID)?
Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest six-month time frame, Avid Technology, Inc. (NASDAQ:AVID) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results shown by the aforementioned research, everyday investors must always monitor hedge fund and insider trading activity, and Avid Technology, Inc. (NASDAQ:AVID) is an important part of this process.
