Is LinkedIn Corp (NYSE:LNKD) a superb stock to buy now? Prominent investors are in a bullish mood. The number of long hedge fund positions rose by 5 in recent months.
According to most market participants, hedge funds are viewed as worthless, old financial vehicles of yesteryear. While there are over 8000 funds trading today, we look at the top tier of this group, close to 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by paying attention to their best stock picks, we have deciphered a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, optimistic insider trading activity is a second way to break down the marketplace. There are plenty of stimuli for an insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).
Consequently, we’re going to take a gander at the key action surrounding LinkedIn Corp (NYSE:LNKD).
What does the smart money think about LinkedIn Corp (NYSE:LNKD)?
Heading into 2013, a total of 35 of the hedge funds we track were bullish in this stock, a change of 17% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, Columbus Circle Investors, managed by Donald Chiboucis, holds the biggest position in LinkedIn Corp (NYSE:LNKD). Columbus Circle Investors has a $93 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is David Stemerman of Conatus Capital Management, with a $74 million position; 1.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Robert Pohly’s Samlyn Capital, James Crichton and Adam Weiss’s Scout Capital Management and Philippe Laffont’s Coatue Management.
As industrywide interest jumped, some big names have been driving this bullishness. Scout Capital Management, managed by James Crichton and Adam Weiss, established the largest position in LinkedIn Corp (NYSE:LNKD). Scout Capital Management had 69 million invested in the company at the end of the quarter. John Thaler’s JAT Capital Management also initiated a $39 million position during the quarter. The other funds with new positions in the stock are Seymour Sy Kaufman and Michael Stark’s Crosslink Capital, Joe DiMenna’s ZWEIG DIMENNA PARTNERS, and Andrew Sandler’s Sandler Capital Management.
Insider trading activity in LinkedIn Corp (NYSE:LNKD)
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the latest half-year time frame, LinkedIn Corp (NYSE:LNKD) has seen zero unique insiders buying, and 13 insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned studies, retail investors should always keep an eye on hedge fund and insider trading activity, and LinkedIn Corp (NYSE:LNKD) shareholders fit into this picture quite nicely.
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