Is Expedia Inc (NASDAQ:EXPE) ready to rally soon? Hedge funds are selling. The number of bullish hedge fund bets retreated by 4 in recent months.
To most traders, hedge funds are viewed as slow, outdated financial tools of the past. While there are over 8000 funds trading today, we hone in on the moguls of this club, about 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by paying attention to their best equity investments, we have discovered a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, bullish insider trading activity is another way to parse down the marketplace. Just as you’d expect, there are lots of reasons for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).
With these “truths” under our belt, let’s take a peek at the key action surrounding Expedia Inc (NASDAQ:EXPE).
Hedge fund activity in Expedia Inc (NASDAQ:EXPE)
In preparation for this quarter, a total of 32 of the hedge funds we track were long in this stock, a change of -11% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, JANA Partners, managed by Barry Rosenstein, holds the biggest position in Expedia Inc (NASDAQ:EXPE). JANA Partners has a $115.7 million position in the stock, comprising 2.4% of its 13F portfolio. Sitting at the No. 2 spot is Steadfast Capital Management, managed by Robert Pitts, which held a $90.6 million position; 2.4% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Andreas Halvorsen’s Viking Global, Steven Cohen’s SAC Capital Advisors and Paul Reeder and Edward Shapiro’s PAR Capital Management.
Since Expedia Inc (NASDAQ:EXPE) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Paul Reeder and Edward Shapiro’s PAR Capital Management sold off the largest stake of all the hedgies we monitor, comprising an estimated $75 million in stock., and John Thaler of JAT Capital Management was right behind this move, as the fund sold off about $60.8 million worth. These transactions are important to note, as total hedge fund interest fell by 4 funds last quarter.
What have insiders been doing with Expedia Inc (NASDAQ:EXPE)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Expedia Inc (NASDAQ:EXPE) has experienced 1 unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Expedia Inc (NASDAQ:EXPE). These stocks are Marriott International Inc (NYSE:MAR), Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT), Hyatt Hotels Corporation (NYSE:H), Wyndham Worldwide Corporation (NYSE:WYN), and InterContinental Hotels Group PLC (ADR) (NYSE:IHG). This group of stocks belong to the lodging industry and their market caps match EXPE’s market cap.