You probably haven't seen this GameStop Corp. (NYSE:GME) yet, but no matter if you're long or short (and getting killed today), it's worth taking a look at.
At the moment, there are plenty of gauges shareholders can use to watch the equity markets. A pair of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outclass their index-focused peers by a solid margin (see just how much).
Just as necessary, optimistic insider trading sentiment is another way to analyze the world of equities. There are a number of motivations for an insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the useful potential of this strategy if "monkeys" know what to do (learn more here).
What's more, it's important to study the latest info for GameStop Corp. (NYSE:GME).
At Q2's end, a total of 21 of the hedge funds we track held long positions in this stock, a change of -19% from the first quarter. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings substantially.
Out of the hedge funds we follow, Cliff Asness's AQR Capital Management had the largest position in GameStop Corp. (NYSE:GME), worth close to $176.8 million, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $142.1 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include John Murphy's Alydar Capital, Phill Gross and Robert Atchinson's Adage Capital Management and Jim Simons's Renaissance Technologies.
Due to the fact GameStop Corp. (NYSE:GME) has experienced bearish sentiment from upper-tier hedge fund managers, logic holds that there is a sect of funds that elected to cut their entire stakes last quarter. Interestingly, Michael Kaufman's MAK Capital One dumped the largest investment of the "upper crust" of funds we track, valued at an estimated $24.9 million in stock, and John C. Walker of Stonerise Capital Management was right behind this move, as the fund cut about $14 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds last quarter.
Legal insider trading, particularly when it's bullish, is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, GameStop Corp. (NYSE:GME) 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 GameStop Corp. (NYSE:GME). These stocks are RadioShack Corporation (NYSE:RSH), hhgregg, Inc. (NYSE:HGG), CONN'S, Inc. (NASDAQ:CONN), and Best Buy Co., Inc. (NYSE:BBY). This group of stocks belong to the electronics stores industry and their market caps are closest to GME's market cap.