Demand Media Inc (NYSE:DMD) was in 13 hedge funds’ portfolio at the end of March. DMD has experienced an increase in support from the world’s most elite money managers in recent months. There were 9 hedge funds in our database with DMD holdings at the end of the previous quarter.
In the financial world, there are plenty of gauges investors can use to watch publicly traded companies. Two of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can beat the market by a superb amount (see just how much).
Equally as important, bullish insider trading activity is a second way to break down the marketplace. As the old adage goes: there are a variety of reasons for an insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if “monkeys” know where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the key action regarding Demand Media Inc (NYSE:DMD).
How have hedgies been trading Demand Media Inc (NYSE:DMD)?
In preparation for this quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 44% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly.
Of the funds we track, Steven Cohen’s SAC Capital Advisors had the most valuable position in Demand Media Inc (NYSE:DMD), worth close to $16 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Joseph A. Jolson of Harvest Capital Strategies, with a $7.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Mark N. Diker’s Diker Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Proxima Capital Management, managed by Youlia Miteva, assembled the largest position in Demand Media Inc (NYSE:DMD). Proxima Capital Management had 1.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.9 million investment in the stock during the quarter. The following funds were also among the new DMD investors: Jay Petschek and Steven Major’s Corsair Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
How have insiders been trading Demand Media Inc (NYSE:DMD)?
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Demand Media Inc (NYSE:DMD) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Demand Media Inc (NYSE:DMD). These stocks are DealerTrack Technologies Inc (NASDAQ:TRAK), Angie’s List Inc (NASDAQ:ANGI), Digital River, Inc. (NASDAQ:DRIV), InterNAP Network Services (NASDAQ:INAP), and VirnetX Holding Corporation (NYSEAMEX:VHC). This group of stocks are the members of the internet software & services industry and their market caps are similar to DMD’s market cap.