Rosetta Stone Inc (NYSE:RST) was in 10 hedge funds’ portfolio at the end of the first quarter of 2013. RST investors should pay attention to an increase in enthusiasm from smart money lately. There were 7 hedge funds in our database with RST positions at the end of the previous quarter.
In today’s marketplace, there are many methods investors can use to track the equity markets. Two of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outclass the S&P 500 by a solid margin (see just how much).
Just as integral, positive insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are a number of stimuli for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand what to do (learn more here).
With all of this in mind, it’s important to take a glance at the recent action regarding Rosetta Stone Inc (NYSE:RST).
What does the smart money think about Rosetta Stone Inc (NYSE:RST)?
At Q1’s end, a total of 10 of the hedge funds we track were long in this stock, a change of 43% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Nierenberg Investment Management, managed by David Nierenberg, holds the most valuable position in Rosetta Stone Inc (NYSE:RST). Nierenberg Investment Management has a $27.8 million position in the stock, comprising 15.3% of its 13F portfolio. Coming in second is John W. Rogers of Ariel Investments, with a $9.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Philip Rosenstrach’s Pomelo Capital and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, initiated the most outsized position in Rosetta Stone Inc (NYSE:RST). D E Shaw had 0.6 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.
What have insiders been doing with Rosetta Stone Inc (NYSE:RST)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, Rosetta Stone Inc (NYSE:RST) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Rosetta Stone Inc (NYSE:RST). These stocks are Shanda Games Limited(ADR) (NASDAQ:GAME), Glu Mobile Inc. (NASDAQ:GLUU), Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD), Avid Technology, Inc. (NASDAQ:AVID), and KongZhong Corporation (ADR) (NASDAQ:KONG). This group of stocks are in the multimedia & graphics software industry and their market caps resemble RST’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Shanda Games Limited(ADR) (NASDAQ:GAME) | 5 | 0 | 0 |
| Glu Mobile Inc. (NASDAQ:GLUU) | 5 | 0 | 1 |
| Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD) | 6 | 0 | 0 |
| Avid Technology, Inc. (NASDAQ:AVID) | 11 | 1 | 0 |
| KongZhong Corporation (ADR) (NASDAQ:KONG) | 3 | 0 | 0 |
With the results exhibited by the aforementioned time-tested strategies, everyday investors must always monitor hedge fund and insider trading activity, and Rosetta Stone Inc (NYSE:RST) shareholders fit into this picture quite nicely.
