Is Move Inc. (NASDAQ:MOVE) a buy here? Hedge funds are getting less bullish. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
According to most traders, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the moguls of this club, close to 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry’s total asset base, and by keeping an eye on their best equity investments, we have identified a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as important, positive insider trading activity is another way to parse down the financial markets. As the old adage goes: there are many stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).
Now, let’s take a glance at the recent action surrounding Move Inc. (NASDAQ:MOVE).
What have hedge funds been doing with Move Inc. (NASDAQ:MOVE)?
Heading into 2013, a total of 15 of the hedge funds we track were long in this stock, a change of 0% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, David Nierenberg’s Nierenberg Investment Management had the biggest position in Move Inc. (NASDAQ:MOVE), worth close to $26 million, accounting for 17.6% of its total 13F portfolio. The second largest stake is held by Harvest Capital Strategies, managed by Joseph A. Jolson, which held a $5 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
Judging by the fact that Move Inc. (NASDAQ:MOVE) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of fund managers that decided to sell off their positions entirely in Q4. At the top of the heap, Eric Semler’s TCS Capital Management said goodbye to the largest investment of the 450+ funds we track, valued at about $5 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund dumped about $0 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Move Inc. (NASDAQ:MOVE)?
Insider buying is at its handiest when the company in focus has experienced transactions within the past six months. Over the last six-month time frame, Move Inc. (NASDAQ:MOVE) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Move Inc. (NASDAQ:MOVE). These stocks are Blucora Inc (NASDAQ:BCOR), HealthStream, Inc. (NASDAQ:HSTM), Renren Inc (NYSE:RENN), Bitauto Hldg Ltd (ADR) (NYSE:BITA), and SouFun Holdings Limited (ADR) (NYSE:SFUN). This group of stocks are in the internet information providers industry and their market caps are closest to MOVE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Blucora Inc (NASDAQ:BCOR)||18||0||2|
|HealthStream, Inc. (NASDAQ:HSTM)||7||0||7|
|Renren Inc (NYSE:RENN)||5||0||0|
|Bitauto Hldg Ltd (ADR) (NYSE:BITA)||4||0||0|
|SouFun Holdings Limited (ADR) (NYSE:SFUN)||6||0||0|
With the returns exhibited by Insider Monkey’s research, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Move Inc. (NASDAQ:MOVE) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.