Should You Buy Activision Blizzard, Inc. (ATVI)?

Does this data make Activision Blizzard, Inc. (NASDAQ:ATVI) a buy? We’ll see.

In the eyes of many investors, hedge funds are perceived as bloated, old investment tools of a period lost to current times. Although there are over 8,000 hedge funds in operation today, Insider Monkey focuses on the elite of this club, close to 525 funds. Analysts calculate that this group has its hands on most of the hedge fund industry’s total capital, and by paying attention to their best investments, we’ve unsheathed a number of investment strategies that have historically beaten 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 started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Activision Blizzard, Inc. (NASDAQ:ATVI)

Just as key, bullish insider trading sentiment is a second way to analyze the financial markets. There are many incentives for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the useful potential of this tactic if investors know where to look (learn more here).

Now that that’s out of the way, it’s important to examine the newest info about Activision Blizzard, Inc. (NASDAQ:ATVI).

What does the smart money think about Activision Blizzard, Inc. (NASDAQ:ATVI)?

Heading into Q3, a total of 35 of the hedge funds we track were long in this stock, a change of 3% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.

According to our 13F database, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in Activision Blizzard, Inc. (NASDAQ:ATVI). Arrowstreet Capital has a $90.8 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $63.5 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

As one would understandably expect, particular hedge funds were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the largest position in Activision Blizzard, Inc. (NASDAQ:ATVI). Arrowstreet Capital had 90.8 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $63.5 million position during the quarter. The following funds were also among the new ATVI investors: Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies, and Israel Englander’s Millennium Management.

How are insiders trading Activision Blizzard, Inc. (NASDAQ:ATVI)?

Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time period, Activision Blizzard, Inc. (NASDAQ:ATVI) has experienced zero unique insiders buying, and 5 insider sales (see the details of insider trades here).

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