Hedge Funds Are Dumping Qihoo 360 Technology Co Ltd (QIHU)

Is Qihoo 360 Technology Co Ltd (NYSE:QIHU) the right pick for your portfolio? Investors who are in the know are becoming less hopeful. The number of bullish hedge fund positions dropped by 6 lately.

In the eyes of most traders, hedge funds are perceived as underperforming, old investment tools of years past. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the aristocrats of this club, close to 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry’s total asset base, and by watching their best investments, we have uncovered a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Qihoo 360 TechnologyEqually as key, bullish insider trading sentiment is another way to break down the stock market universe. Obviously, there are many reasons for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).

Now, it’s important to take a gander at the latest action regarding Qihoo 360 Technology Co Ltd (NYSE:QIHU).

What have hedge funds been doing with Qihoo 360 Technology Co Ltd (NYSE:QIHU)?

At Q1’s end, a total of 12 of the hedge funds we track held long positions in this stock, a change of -33% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings significantly.

Of the funds we track, Emerging Sovereign Group, managed by J Kevin Kenny Jr, holds the most valuable position in Qihoo 360 Technology Co Ltd (NYSE:QIHU). Emerging Sovereign Group has a $51.2 million position in the stock, comprising 3.1% of its 13F portfolio. The second largest stake is held by Alex Sacerdote of Whale Rock Capital Management, with a $27.1 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, SAC Subsidiary’s CR Intrinsic Investors and Howard Marks’s Oaktree Capital Management.

Seeing as Qihoo 360 Technology Co Ltd (NYSE:QIHU) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of funds who sold off their entire stakes last quarter. Intriguingly, Rob Citrone’s Discovery Capital Management said goodbye to the biggest position of the 450+ funds we track, comprising close to $26.9 million in stock.. Donald Chiboucis’s fund, Columbus Circle Investors, also dropped its stock, about $10.9 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 6 funds last quarter.

How have insiders been trading Qihoo 360 Technology Co Ltd (NYSE:QIHU)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time frame, Qihoo 360 Technology Co Ltd (NYSE:QIHU) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns demonstrated by Insider Monkey’s strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Qihoo 360 Technology Co Ltd (NYSE:QIHU) is no exception.

Click here to learn why you should track hedge funds