EarthLink, Inc. (NASDAQ:ELNK) has experienced an increase in enthusiasm from smart money in recent months.
To the average investor, there are tons of methods shareholders can use to monitor publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outperform the S&P 500 by a superb amount (see just how much).
Just as important, optimistic insider trading activity is another way to parse down the investments you’re interested in. There are lots of stimuli for an executive to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this method if investors know what to do (learn more here).
With all of this in mind, it’s important to take a gander at the latest action encompassing EarthLink, Inc. (NASDAQ:ELNK).
How have hedgies been trading EarthLink, Inc. (NASDAQ:ELNK)?
In preparation for this year, a total of 15 of the hedge funds we track were long in this stock, a change of 50% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially.
Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in EarthLink, Inc. (NASDAQ:ELNK). Renaissance Technologies has a $44 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $20 million position; 0.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Chuck Royce’s Royce & Associates, Mario Gabelli’s GAMCO Investors and Ken Griffin’s Citadel Investment Group.
Now, key money managers have been driving this bullishness. Beach Point Capital Management, managed by Carl Goldsmith and Scott Klein, initiated the biggest position in EarthLink, Inc. (NASDAQ:ELNK). Beach Point Capital Management had 1 million invested in the company at the end of the quarter. Neil Chriss’s Hutchin Hill Capital also made a <$1 million investment in the stock during the quarter. The other funds with brand new ELNK positions are Paul Tudor Jones’s Tudor Investment Corp, Mike Vranos’s Ellington, and Steven Cohen’s SAC Capital Advisors.
What do corporate executives and insiders think about EarthLink, Inc. (NASDAQ:ELNK)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest half-year time period, EarthLink, Inc. (NASDAQ:ELNK) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to EarthLink, Inc. (NASDAQ:ELNK). These stocks are magicJack VocalTec Ltd (NASDAQ:CALL), Shenandoah Telecommunications Company (NASDAQ:SHEN), Atlantic Tele-Network, Inc. (NASDAQ:ATNI), Consolidated Communications Holdings Inc (NASDAQ:CNSL), and Cincinnati Bell Inc. (NYSE:CBB). All of these stocks are in the telecom services – domestic industry and their market caps resemble ELNK’s market cap.