LeapFrog Enterprises, Inc. (NYSE:LF) was in 14 hedge funds’ portfolio at the end of December. LF has seen a decrease in support from the world’s most elite money managers in recent months. There were 19 hedge funds in our database with LF positions at the end of the previous quarter.
In today’s marketplace, there are a multitude of indicators market participants can use to analyze Mr. Market. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can beat the market by a very impressive margin (see just how much).
Equally as key, optimistic insider trading activity is a second way to parse down the stock market universe. There are plenty of motivations for an executive to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).
Keeping this in mind, let’s take a gander at the recent action surrounding LeapFrog Enterprises, Inc. (NYSE:LF).
What does the smart money think about LeapFrog Enterprises, Inc. (NYSE:LF)?
At the end of the fourth quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of -26% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Driehaus Capital, managed by Richard Driehaus, holds the largest position in LeapFrog Enterprises, Inc. (NYSE:LF). Driehaus Capital has a $6 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Dmitry Balyasny of Balyasny Asset Management, with a $4 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Jim Simons’s Renaissance Technologies, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Robert B. Gillam’s McKinley Capital Management.
Since LeapFrog Enterprises, Inc. (NYSE:LF) has faced declining sentiment from the smart money, it’s easy to see that there is a sect of funds who were dropping their full holdings at the end of the year. It’s worth mentioning that Donald Chiboucis’s Columbus Circle Investors dumped the largest position of the 450+ funds we watch, comprising about $23 million in stock.. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its call options., about $5 million worth. These transactions are important to note, as total hedge fund interest was cut by 5 funds at the end of the year.
Insider trading activity in LeapFrog Enterprises, Inc. (NYSE:LF)
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time period, LeapFrog Enterprises, Inc. (NYSE:LF) has experienced 5 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to LeapFrog Enterprises, Inc. (NYSE:LF). These stocks are JAKKS Pacific, Inc. (NASDAQ:JAKK), Gaming Partners International Corp. (NASDAQ:GPIC), Hasbro, Inc. (NASDAQ:HAS), Kid Brands Inc (NYSE:KID), and Mattel, Inc. (NASDAQ:MAT). This group of stocks belong to the toys & games industry and their market caps match LF’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|JAKKS Pacific, Inc. (NASDAQ:JAKK)||11||0||0|
|Gaming Partners International Corp. (NASDAQ:GPIC)||2||0||1|
|Hasbro, Inc. (NASDAQ:HAS)||15||0||7|
|Kid Brands Inc (NYSE:KID)||7||3||0|
|Mattel, Inc. (NASDAQ:MAT)||22||0||14|
With the returns exhibited by the aforementioned strategies, retail investors should always monitor hedge fund and insider trading sentiment, and LeapFrog Enterprises, Inc. (NYSE:LF) is no exception.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.