Hedge Funds Are Selling Vonage Holdings Corp. (VG)
Is it smart to be bullish on Vonage Holdings Corp. (NYSE:VG)?
In today’s marketplace, there are plenty of gauges investors can use to watch stocks. A duo of the most under-the-radar 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 hedge fund managers can outclass their index-focused peers by a healthy amount (see just how much).
Just as key, positive insider trading sentiment is another way to analyze the stock market universe. As the old adage goes: there are plenty of reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this method if you know what to do (learn more here).
Furthermore, it's important to discuss the recent info surrounding Vonage Holdings Corp. (NYSE:VG).
How have hedgies been trading Vonage Holdings Corp. (NYSE:VG)?
At the end of the second quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of -12% from the first quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were upping their stakes significantly.
According to our 13F database, Silver Point Capital, managed by Edward A. Mule, holds the biggest position in Vonage Holdings Corp. (NYSE:VG). Silver Point Capital has a $20.4 million position in the stock, comprising 2.1% of its 13F portfolio. On Silver Point Capital's heels is Renaissance Technologies, managed by Jim Simons, which held a $20.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include D. E. Shaw's D E Shaw, Eric Semler's TCS Capital Management and Joel Greenblatt's Gotham Asset Management.
Since Vonage Holdings Corp. (NYSE:VG) has experienced a fall in interest from the entirety of the hedge funds we track, we can see that there exists a select few fund managers that slashed their entire stakes at the end of the second quarter. Interestingly, Charles Davidson's Wexford Capital dropped the biggest investment of the 450+ funds we watch, totaling close to $0.5 million in stock, and Chuck Royce of Royce & Associates was right behind this move, as the fund dumped about $0.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds at the end of the second quarter.
How have insiders been trading Vonage Holdings Corp. (NYSE:VG)?
Legal insider trading, particularly when it's bullish, is best served when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Vonage Holdings Corp. (NYSE:VG) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to Vonage Holdings Corp. (NYSE:VG). These stocks are Lumos Networks Corp (NASDAQ:LMOS), Cogent Communications Group, Inc. (NASDAQ:CCOI), RigNet Inc (NASDAQ:RNET), Iridium Communications Inc. (NASDAQ:IRDM), and Premiere Global Services, Inc. (NYSE:PGI). This group of stocks belong to the diversified communication services industry and their market caps are similar to VG's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Lumos Networks Corp (NASDAQ:LMOS)
Cogent Communications Group, Inc. (NASDAQ:CCOI)
RigNet Inc (NASDAQ:RNET)
Iridium Communications Inc. (NASDAQ:IRDM)
Premiere Global Services, Inc. (NYSE:PGI)
Using the returns explained by the previously mentioned research, regular investors should always track hedge fund and insider trading activity, and Vonage Holdings Corp. (NYSE:VG) applies perfectly to this mantra.