Now, according to many market players, hedge funds are perceived as delayed, outdated financial vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation in present day, Insider Monkey aim at the crème de la crème of this group, about 525 funds. It is widely held that this group controls the lion's share of the hedge fund industry's total assets, and by paying attention to their highest quality picks, we've spotted a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as crucial, positive insider trading activity is another way to analyze the investments you're interested in. As the old adage goes: there are plenty of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if you understand where to look (learn more here).
Keeping this in mind, we're going to discuss the recent info about Mercadolibre Inc (NASDAQ:MELI).
Heading into Q3, a total of 19 of the hedge funds we track were bullish in this stock, a change of 171% from the previous quarter. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes considerably.
Consequently, certain money managers have jumped into Mercadolibre Inc (NASDAQ:MELI) headfirst. Orbis Investment Management, managed by William B. Gray, created the most outsized position in Mercadolibre Inc (NASDAQ:MELI). Orbis Investment Management had 95.9 million invested in the company at the end of the quarter. Josh Resnick's Jericho Capital Asset Management also initiated a $37 million position during the quarter. The other funds with new positions in the stock are Richard Driehaus's Driehaus Capital, Jim Simons's Renaissance Technologies, and Israel Englander's Millennium Management.
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 period, Mercadolibre Inc (NASDAQ:MELI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Mercadolibre Inc (NASDAQ:MELI). These stocks are E Commerce China Dangdang Inc (ADR) (NYSE:DANG), Stamps.com Inc. (NASDAQ:STMP), PC Connection, Inc. (NASDAQ:PCCC), Liquidity Services, Inc. (NASDAQ:LQDT), and Liberty Interactive (Interactive group) (NASDAQ:LINTA). All of these stocks are in the catalog & mail order houses industry and their market caps match MELI's market cap.