Tripadvisor Inc (NASDAQ:TRIP) investors should be aware of a decrease in hedge fund sentiment in recent months.
If you’d ask most market participants, hedge funds are perceived as slow, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, we choose to focus on the aristocrats of this group, about 450 funds. It is widely believed that this group has its hands on most of the hedge fund industry’s total asset base, and by monitoring their top investments, we have uncovered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 (see all of our picks from August).
Equally as beneficial, optimistic insider trading activity is a second way to parse down the world of equities. There are many incentives for a corporate insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this method if piggybackers understand where to look (learn more here).
Now, let’s take a peek at the recent action regarding Tripadvisor Inc (NASDAQ:TRIP).
How have hedgies been trading Tripadvisor Inc (NASDAQ:TRIP)?
In preparation for this quarter, a total of 41 of the hedge funds we track were bullish in this stock, a change of -15% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
When looking at the hedgies we track, Lone Pine Capital, managed by Stephen Mandel, holds the largest position in Tripadvisor Inc (NASDAQ:TRIP). Lone Pine Capital has a $341.5 million position in the stock, comprising 1.8% of its 13F portfolio. The second largest stake is held by Pennant Capital Management, managed by Alan Fournier, which held a $230.3 million position; the fund has 4.5% of its 13F portfolio invested in the stock. Some other peers that are bullish include Philippe Laffont’s Coatue Management, Paul Reeder and Edward Shapiro’s PAR Capital Management and Rob Citrone’s Discovery Capital Management.
Since Tripadvisor Inc (NASDAQ:TRIP) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of money managers that elected to cut their positions entirely last quarter. Interestingly, Barry Rosenstein’s JANA Partners dumped the largest investment of all the hedgies we monitor, worth about $95.3 million in stock.. Patrick McCormack’s fund, Tiger Consumer Management, also cut its stock, about $64.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 7 funds last quarter.
Insider trading activity in Tripadvisor Inc (NASDAQ:TRIP)
Insider buying is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the last six-month time period, Tripadvisor Inc (NASDAQ:TRIP) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Tripadvisor Inc (NASDAQ:TRIP). These stocks are AOL, Inc. (NYSE:AOL), IAC/InterActiveCorp (NASDAQ:IACI), Groupon Inc (NASDAQ:GRPN), Akamai Technologies, Inc. (NASDAQ:AKAM), and Yandex NV (NASDAQ:YNDX). This group of stocks are the members of the internet information providers industry and their market caps are similar to TRIP’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|AOL, Inc. (NYSE:AOL)||22||0||5|
|Groupon Inc (NASDAQ:GRPN)||25||0||0|
|Akamai Technologies, Inc. (NASDAQ:AKAM)||31||2||5|
|Yandex NV (NASDAQ:YNDX)||23||0||0|
With the results demonstrated by the aforementioned studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Tripadvisor Inc (NASDAQ:TRIP) applies perfectly to this mantra.