This Metric Says You Are Smart to Buy GameStop Corp. (GME)

Page 1 of 2

GameStop Corp. (NYSE:GME)GameStop Corp. (NYSE:GME) was in 26 hedge funds’ portfolio at the end of the first quarter of 2013. GME shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 24 hedge funds in our database with GME positions at the end of the previous quarter.

According to most shareholders, hedge funds are seen as worthless, old investment tools of years past. While there are more than 8000 funds trading at the moment, we choose to focus on the masters of this club, around 450 funds. It is estimated that this group controls most of the hedge fund industry’s total asset base, and by monitoring their highest performing investments, we have discovered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, bullish insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are plenty of motivations for an executive to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if piggybackers know what to do (learn more here).

With these “truths” under our belt, it’s important to take a peek at the recent action encompassing GameStop Corp. (NYSE:GME).

Hedge fund activity in GameStop Corp. (NYSE:GME)

In preparation for this quarter, a total of 26 of the hedge funds we track held long positions in this stock, a change of 8% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes substantially.

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the largest position in GameStop Corp. (NYSE:GME). Royce & Associates has a $137 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $111.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include John Murphy’s Alydar Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and John Murphy’s Alydar Capital.

Now, key hedge funds were breaking ground themselves. MAK Capital One, managed by Michael Kaufman, initiated the most outsized position in GameStop Corp. (NYSE:GME). MAK Capital One had 24.9 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $16 million investment in the stock during the quarter. The following funds were also among the new GME investors: Daniel S. Och’s OZ Management, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Scott Scher & Michael Prober’s Clovis Capital Management.

Insider trading activity in GameStop Corp. (NYSE:GME)

Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, GameStop Corp. (NYSE:GME) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to GameStop Corp. (NYSE:GME). These stocks are RadioShack Corporation (NYSE:RSH), hhgregg, Inc. (NYSE:HGG), CONN’S, Inc. (NASDAQ:CONN), and Best Buy Co., Inc. (NYSE:BBY). All of these stocks are in the electronics stores industry and their market caps are closest to GME’s market cap.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!