CGI Group Inc. (USA) (GIB), SINA Corp (SINA): NetEase, Inc (ADR) (NTES): Insiders Are Dumping, Should You?

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NetEase, Inc (ADR) (NASDAQ:NTES) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late.

In today’s marketplace, there are tons of metrics shareholders can use to watch Mr. Market. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outclass the broader indices by a healthy margin (see just how much).

Just as beneficial, bullish insider trading activity is a second way to break down the stock market universe. There are many motivations for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand where to look (learn more here).

NetEase, Inc (ADR) (NASDAQ:NTES)

Consequently, we’re going to take a gander at the key action regarding NetEase, Inc (ADR) (NASDAQ:NTES).

What does the smart money think about NetEase, Inc (ADR) (NASDAQ:NTES)?

At year’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, William B. Gray’s Orbis Investment Management had the biggest position in NetEase, Inc (ADR) (NASDAQ:NTES), worth close to $856.6 million, comprising 8.5% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $124.9 million position; 0.4% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management, Stephen Mandel’s Lone Pine Capital and Christopher Lord’s Criterion Capital.

Due to the fact that NetEase, Inc (ADR) (NASDAQ:NTES) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedgies who were dropping their entire stakes heading into 2013. Intriguingly, John Hurley’s Cavalry Asset Management dropped the biggest investment of all the hedgies we key on, valued at close to $14.3 million in stock., and Mark McGoldrick and Jason Maynard of Mouth Kellett Capital Management was right behind this move, as the fund dumped about $8.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading NetEase, Inc (ADR) (NASDAQ:NTES)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time period, NetEase, Inc (ADR) (NASDAQ:NTES) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to NetEase, Inc (ADR) (NASDAQ:NTES). These stocks are Net Element Inc (PINK:NETE), The Ultimate Software Group, Inc. (NASDAQ:ULTI), SINA Corp (NASDAQ:SINA), Equinix Inc (NASDAQ:EQIX), and CGI Group Inc. (USA) (NYSE:GIB). This group of stocks are in the internet software & services industry and their market caps are closest to NTES’s market cap.

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