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Priceline.com Inc (NASDAQ:PCLN): Insiders Are Dumping, Should You?

Priceline.com Inc (NASDAQ:PCLN) was in 60 hedge funds’ portfolio at the end of December. PCLN has seen a decrease in hedge fund sentiment recently. There were 69 hedge funds in our database with PCLN positions at the end of the previous quarter.

Priceline.com Inc (NASDAQ:PCLN)

If you’d ask most traders, hedge funds are assumed to be worthless, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we hone in on the aristocrats of this club, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by monitoring their highest performing equity investments, we have unsheathed a few investment strategies that have historically outperformed the broader indices. 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 started 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).

Equally as key, positive insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are a variety of incentives for an executive to sell shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the market-beating potential of this method if shareholders know where to look (learn more here).

With all of this in mind, let’s take a peek at the key action surrounding Priceline.com Inc (NASDAQ:PCLN).

What does the smart money think about Priceline.com Inc (NASDAQ:PCLN)?

At the end of the fourth quarter, a total of 60 of the hedge funds we track held long positions in this stock, a change of -13% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes considerably.

Of the funds we track, Lone Pine Capital, managed by Stephen Mandel, holds the biggest position in Priceline.com Inc (NASDAQ:PCLN). Lone Pine Capital has a $1.099 billion position in the stock, comprising 6.9% of its 13F portfolio. On Lone Pine Capital’s heels is John Griffin of Blue Ridge Capital, with a $344 million position; 2.3% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Philippe Laffont’s Coatue Management, Chase Coleman’s Tiger Global Management LLC and Jim Simons’s Renaissance Technologies.

Due to the fact that Priceline.com Inc (NASDAQ:PCLN) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of money managers who were dropping their positions entirely last quarter. At the top of the heap, Andreas Halvorsen’s Viking Global dumped the biggest stake of all the hedgies we watch, worth about $421 million in stock., and Rob Citrone of Discovery Capital Management was right behind this move, as the fund cut about $91 million worth. These transactions are interesting, as total hedge fund interest fell by 9 funds last quarter.

What do corporate executives and insiders think about Priceline.com Inc (NASDAQ:PCLN)?

Insider buying is at its handiest when the company in question has experienced transactions within the past 180 days. Over the last six-month time frame, Priceline.com Inc (NASDAQ:PCLN) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned time-tested strategies, everyday investors should always watch hedge fund and insider trading activity, and Priceline.com Inc (NASDAQ:PCLN) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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