Is Nuance Communications Inc. (NUAN) Going to Burn These Hedge Funds?
In the financial world, there are dozens of methods investors can use to monitor Mr. Market. A pair of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass the S&P 500 by a superb margin (see just how much).
Just as key, bullish insider trading sentiment is another way to analyze the stock market universe. As the old adage goes: there are plenty of reasons for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).
Thus, it's important to analyze the latest info surrounding Nuance Communications Inc. (NASDAQ:NUAN).
What have hedge funds been doing with Nuance Communications Inc. (NASDAQ:NUAN)?
Heading into Q3, a total of 25 of the hedge funds we track were long in this stock, a change of 25% from the first quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably.
When using filings from the hedgies we track, Icahn Capital LP, managed by Carl Icahn, holds the most valuable position in Nuance Communications Inc. (NASDAQ:NUAN). Icahn Capital LP has a $579.8 million position in the stock, comprising 2.7% of its 13F portfolio. On Icahn Capital LP's heels is Philippe Laffont of Coatue Management, with a $36.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include James Crichton and Adam Weiss's Scout Capital Management, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management.
With a general bullishness amongst the titans, certain bigger names have jumped into Nuance Communications Inc. (NASDAQ:NUAN) headfirst. Icahn Capital LP, managed by Carl Icahn, established the largest position in Nuance Communications Inc. (NASDAQ:NUAN). Icahn Capital LP had 579.8 million invested in the company at the end of the quarter. Philippe Laffont's Coatue Management also made a $36.9 million investment in the stock during the quarter. The other funds with brand new NUAN positions are James Crichton and Adam Weiss's Scout Capital Management, George Soros's Soros Fund Management, and Ken Griffin's Citadel Investment Group.
How are insiders trading Nuance Communications Inc. (NASDAQ:NUAN)?
Insider buying is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last six-month time period, Nuance Communications Inc. (NASDAQ:NUAN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to Nuance Communications Inc. (NASDAQ:NUAN). These stocks are Msci Inc (NYSE:MSCI), Red Hat, Inc. (NYSE:RHT), SolarWinds Inc (NYSE:SWI), F5 Networks, Inc. (NASDAQ:FFIV), and BMC Software, Inc. (NASDAQ:BMC). This group of stocks are the members of the application software industry and their market caps match NUAN's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Msci Inc (NYSE:MSCI)
Red Hat, Inc. (NYSE:RHT)
SolarWinds Inc (NYSE:SWI)
F5 Networks, Inc. (NASDAQ:FFIV)
BMC Software, Inc. (NASDAQ:BMC)
Using the returns demonstrated by the previously mentioned research, average investors must always watch hedge fund and insider trading sentiment, and Nuance Communications Inc. (NASDAQ:NUAN) is no exception.