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Hedge Funds Are Betting On Travelzoo Inc. (TZOO)

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Is Travelzoo Inc. (NASDAQ:TZOO) the right investment to pursue these days? The best stock pickers are in an optimistic mood. The number of long hedge fund positions improved by 4 lately.

In the eyes of most market participants, hedge funds are viewed as underperforming, old financial vehicles of the past. While there are more than 8000 funds with their doors open at present, we hone in on the bigwigs of this club, around 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by paying attention to their best stock picks, we have spotted a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as integral, positive insider trading activity is a second way to parse down the world of equities. There are a variety of stimuli for an executive to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if you know what to do (learn more here).

Keeping this in mind, we’re going to take a peek at the latest action surrounding Travelzoo Inc. (NASDAQ:TZOO).

What have hedge funds been doing with Travelzoo Inc. (NASDAQ:TZOO)?

At Q1’s end, a total of 10 of the hedge funds we track were long in this stock, a change of 67% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.

Travelzoo Inc. (NASDAQ:TZOO)When looking at the hedgies we track, Bares Capital Management, managed by Brian Bares, holds the most valuable position in Travelzoo Inc. (NASDAQ:TZOO). Bares Capital Management has a $19.9 million position in the stock, comprising 2.6% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $3.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Joel Greenblatt’s Gotham Asset Management and Cliff Asness’s AQR Capital Management.

As industrywide interest jumped, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the biggest position in Travelzoo Inc. (NASDAQ:TZOO). Millennium Management had 1.5 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.9 million investment in the stock during the quarter. The other funds with brand new TZOO positions are John Overdeck and David Siegel’s Two Sigma Advisors, Glenn Russell Dubin’s Highbridge Capital Management, and Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital.

How are insiders trading Travelzoo Inc. (NASDAQ:TZOO)?

Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time period, Travelzoo Inc. (NASDAQ:TZOO) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Travelzoo Inc. (NASDAQ:TZOO). These stocks are SouFun Holdings Limited (ADR) (NYSE:SFUN), Move Inc. (NASDAQ:MOVE), Global Sources Ltd. (Bermuda) (NASDAQ:GSOL), Bitauto Hldg Ltd (ADR) (NYSE:BITA), and Renren Inc (NYSE:RENN). All of these stocks are in the internet information providers industry and their market caps match TZOO’s market cap.

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