Is it smart to be bullish on Leap Wireless International, Inc. (NASDAQ:LEAP)?
In today’s marketplace, there are plenty of gauges shareholders can use to analyze Mr. Market. A couple of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a superb margin (see just how much).
Just as key, bullish insider trading sentiment is another way to analyze the stock market universe. As the old adage goes: there are lots of motivations for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).
Furthermore, let’s discuss the latest info surrounding Leap Wireless International, Inc. (NASDAQ:LEAP).
How have hedgies been trading Leap Wireless International, Inc. (NASDAQ:LEAP)?
At the end of the second quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of -36% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes substantially.
Out of the hedge funds we follow, MHR Fund Management, managed by Mark Rachesky, holds the largest position in Leap Wireless International, Inc. (NASDAQ:LEAP). MHR Fund Management has a $158.4 million position in the stock, comprising 5.5% of its 13F portfolio. On MHR Fund Management’s heels is Paulson & Co, managed by John Paulson, which held a $52.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Jeffrey Altman’s Owl Creek Asset Management, Ken Griffin’s Citadel Investment Group and Joel Greenblatt’s Gotham Asset Management.
Due to the fact Leap Wireless International, Inc. (NASDAQ:LEAP) has witnessed a fall in interest from the top-tier hedge fund industry, it’s easy to see that there exists a select few hedge funds who sold off their entire stakes at the end of the second quarter. At the top of the heap, Alec Litowitz and Ross Laser’s Magnetar Capital dumped the biggest stake of the 450+ funds we watch, comprising close to $8.6 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dumped its stock, about $3.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 5 funds at the end of the second quarter.
What do corporate executives and insiders think about Leap Wireless International, Inc. (NASDAQ:LEAP)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the latest half-year time period, Leap Wireless International, Inc. (NASDAQ:LEAP) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Leap Wireless International, Inc. (NASDAQ:LEAP). These stocks are Maxcom Telecomunic S.A.B. de C.V. (ADR) (NYSE:MXT), USA Mobility Inc (NASDAQ:USMO), NII Holdings, Inc. (NASDAQ:NIHD), UTStarcom Holdings Corp (NASDAQ:UTSI), and Pendrell Corporation – Class A (NASDAQ:PCO). All of these stocks are in the wireless communications industry and their market caps are closest to LEAP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Maxcom Telecomunic S.A.B. de C.V. (ADR) (NYSE:MXT) | 0 | 0 | |
| USA Mobility Inc (NASDAQ:USMO) | 8 | 0 | 0 |
| NII Holdings, Inc. (NASDAQ:NIHD) | 18 | 0 | 0 |
| UTStarcom Holdings Corp (NASDAQ:UTSI) | 8 | 0 | 0 |
| Pendrell Corporation – Class A (NASDAQ:PCO) | 7 | 0 | 0 |
Using the returns shown by the previously mentioned strategies, regular investors should always keep one eye on hedge fund and insider trading activity, and Leap Wireless International, Inc. (NASDAQ:LEAP) is no exception.
