The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Barracuda Networks Inc (NYSE:CUDA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Barracuda Networks Inc (NYSE:CUDA) an exceptional investment right now? Hedge funds are becoming less hopeful. The number of bullish hedge fund positions dropped by 2 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Erin Energy Corp (NYSEMKT:ERN), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), and Trina Solar Limited (ADR) (NYSE:TSL) to gather more data points.
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In today’s marketplace there are several metrics stock market investors use to analyze their holdings. A pair of the less known metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top money managers can outpace the S&P 500 by a superb margin (see the details here).
Keeping this in mind, we’re going to take a gander at the new action encompassing Barracuda Networks Inc (NYSE:CUDA).
How have hedgies been trading Barracuda Networks Inc (NYSE:CUDA)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, George McCabe’s Portolan Capital Management has the number one position in Barracuda Networks Inc (NYSE:CUDA), worth close to $8 million, accounting for 1.1% of its total 13F portfolio. On Portolan Capital Management’s heels is Alyeska Investment Group, led by Anand Parekh, holding an $5.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish comprise Neil Chriss’s Hutchin Hill Capital, Marc Majzner’s Clearline Capital and Ken Griffin’s Citadel Investment Group.
Because Barracuda Networks Inc (NYSE:CUDA) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds who were dropping their positions entirely by the end of the third quarter. Interestingly, Richard Driehaus’s Driehaus Capital dumped the largest position of all the hedgies tracked by Insider Monkey, totaling close to $2.9 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund dropped about $1.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Barracuda Networks Inc (NYSE:CUDA) but similarly valued. We will take a look at Erin Energy Corp (NYSEMKT:ERN), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Trina Solar Limited (ADR) (NYSE:TSL), and PDL BioPharma Inc. (NASDAQ:PDLI). This group of stocks’ market valuations are similar to CUDA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ERN | 5 | 1718 | -2 |
| GLRE | 13 | 47731 | -3 |
| TSL | 16 | 256244 | -8 |
| PDLI | 20 | 88639 | 6 |
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $22 million in CUDA’s case. PDL BioPharma Inc. (NASDAQ:PDLI) is the most popular stock in this table. On the other hand Erin Energy Corp (NYSEMKT:ERN) is the least popular one with only 5 bullish hedge fund positions. Barracuda Networks Inc (NYSE:CUDA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PDLI might be a better candidate to consider a long position.
