Giant Interactive Group Inc (ADR) (NYSE:GA) investors should pay attention to an increase in enthusiasm from smart money of late.
According to most investors, hedge funds are assumed to be worthless, old investment tools of yesteryear. While there are more than 8000 funds in operation at present, we choose to focus on the aristocrats of this club, about 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total capital, and by keeping an eye on their best stock picks, we have unsheathed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, bullish insider trading activity is another way to parse down the world of equities. Obviously, there are a number of reasons for an executive to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if investors know where to look (learn more here).
Now, let’s take a glance at the recent action surrounding Giant Interactive Group Inc (ADR) (NYSE:GA).
What have hedge funds been doing with Giant Interactive Group Inc (ADR) (NYSE:GA)?
At the end of the fourth quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 160% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Giant Interactive Group Inc (ADR) (NYSE:GA). Citadel Investment Group has a $7 million position in the stock, comprising 0% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $7 million position; 0% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Robert B. Gillam’s McKinley Capital Management, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management.
With a general bullishness amongst the heavyweights, some big names have jumped into Giant Interactive Group Inc (ADR) (NYSE:GA) headfirst. D E Shaw, managed by D. E. Shaw, initiated the most outsized position in Giant Interactive Group Inc (ADR) (NYSE:GA). D E Shaw had 2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $2 million investment in the stock during the quarter. The other funds with brand new GA positions are Jeffrey Altman’s Owl Creek Asset Management, Bruce Kovner’s Caxton Associates LP, and David Costen Haley’s HBK Investments.
What have insiders been doing with Giant Interactive Group Inc (ADR) (NYSE:GA)?
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Giant Interactive Group Inc (ADR) (NYSE:GA) has seen 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 Giant Interactive Group Inc (ADR) (NYSE:GA). These stocks are The Advisory Board Company (NASDAQ:ABCO), SYNNEX Corporation (NYSE:SNX), Healthcare Services Group, Inc. (NASDAQ:HCSG), Fair Isaac Corporation (NYSE:FICO), and Shutterstock Inc (NYSE:SSTK). This group of stocks belong to the business services industry and their market caps resemble GA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|The Advisory Board Company (NASDAQ:ABCO)||9||0||9|
|SYNNEX Corporation (NYSE:SNX)||7||0||4|
|Healthcare Services Group, Inc. (NASDAQ:HCSG)||7||0||3|
|Fair Isaac Corporation (NYSE:FICO)||11||0||7|
|Shutterstock Inc (NYSE:SSTK)||2||1||0|
With the returns exhibited by our studies, retail investors must always monitor hedge fund and insider trading activity, and Giant Interactive Group Inc (ADR) (NYSE:GA) applies perfectly to this mantra.