Is Groupon Inc (NASDAQ:GRPN) a healthy stock for your portfolio? Hedge funds are in a bearish mood. The number of long hedge fund bets fell by 1 recently.
If you’d ask most investors, hedge funds are perceived as unimportant, outdated financial tools of the past. While there are greater than 8000 funds in operation at present, we hone in on the aristocrats of this group, around 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total asset base, and by paying attention to their top picks, we have determined a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (check out a sample of our picks).
Just as beneficial, optimistic insider trading sentiment is another way to parse down the marketplace. There are plenty of reasons for an executive to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this tactic if piggybackers understand where to look (learn more here).
Now, we’re going to take a gander at the key action encompassing Groupon Inc (NASDAQ:GRPN).
How are hedge funds trading Groupon Inc (NASDAQ:GRPN)?
In preparation for this year, a total of 18 of the hedge funds we track were bullish in this stock, a change of -5% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially.
According to our comprehensive database, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC had the largest position in Groupon Inc (NASDAQ:GRPN), worth close to $316 million, comprising 5.9% of its total 13F portfolio. The second largest stake is held by Philippe Laffont of Coatue Management, with a $36 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Bill Miller’s Legg Mason Capital Management, Pasco Alfaro / Richard Tumure’s Miura Global Management and Christopher Lord’s Criterion Capital.
Due to the fact that Groupon Inc (NASDAQ:GRPN) has experienced declining sentiment from hedge fund managers, it’s easy to see that there were a few money managers that slashed their full holdings in Q4. It’s worth mentioning that George Soros’s Soros Fund Management said goodbye to the biggest position of all the hedgies we watch, totaling an estimated $12 million in stock., and Christopher MedlockáJames of Partner Fund Management was right behind this move, as the fund cut about $2 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds in Q4.
How are insiders trading Groupon Inc (NASDAQ:GRPN)?
Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the last half-year time period, Groupon Inc (NASDAQ:GRPN) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results demonstrated by our strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Groupon Inc (NASDAQ:GRPN) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.