Netflix, Inc. (NASDAQ:NFLX) was in 48 hedge funds’ portfolio at the end of the first quarter of 2013. NFLX investors should pay attention to an increase in support from the world’s most elite money managers recently. There were 35 hedge funds in our database with NFLX holdings at the end of the previous quarter.
In the eyes of most investors, hedge funds are viewed as slow, outdated investment vehicles of years past. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the upper echelon of this group, about 450 funds. It is widely believed that this group oversees the majority of the smart money’s total capital, and by keeping an eye on their highest performing equity investments, we have brought to light a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to 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 (check out a sample of our picks).
Equally as integral, positive insider trading sentiment is a second way to break down the financial markets. There are a variety of incentives for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this tactic if shareholders know what to do (learn more here).
Now, it’s important to take a look at the recent action regarding Netflix, Inc. (NASDAQ:NFLX).
How are hedge funds trading Netflix, Inc. (NASDAQ:NFLX)?
At Q1’s end, a total of 48 of the hedge funds we track held long positions in this stock, a change of 37% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Icahn Capital LP, managed by Carl Icahn, holds the biggest position in Netflix, Inc. (NASDAQ:NFLX). Icahn Capital LP has a $1.0495 billion position in the stock, comprising 6.2% of its 13F portfolio. Sitting at the No. 2 spot is Philippe Laffont of Coatue Management, with a $255.8 million position; 3.2% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include John Griffin’s Blue Ridge Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Chase Coleman and Feroz Dewan’s Tiger Global Management LLC.
Consequently, key hedge funds were breaking ground themselves. Blue Ridge Capital, managed by John Griffin, created the most outsized position in Netflix, Inc. (NASDAQ:NFLX). Blue Ridge Capital had 189.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $130.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, Daniel Benton’s Andor Capital Management, and Jim Simons’s Renaissance Technologies.
What have insiders been doing with Netflix, Inc. (NASDAQ:NFLX)?
Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, Netflix, Inc. (NASDAQ:NFLX) has seen zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey’s research, everyday investors must always monitor hedge fund and insider trading sentiment, and Netflix, Inc. (NASDAQ:NFLX) applies perfectly to this mantra.