It’d be best to avoid Zynga Inc (NASDAQ:ZNGA). This data will lend support to this opinion.
At the moment, there are plenty of gauges shareholders can use to track stocks. Two of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can outpace the broader indices by a solid amount (see just how much).
Equally as necessary, positive insider trading activity is a second way to look at the world of equities. Just as you’d expect, there are many stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Thus, we’re going to examine the recent info surrounding Zynga Inc (NASDAQ:ZNGA).
What have hedge funds been doing with Zynga Inc (NASDAQ:ZNGA)?
In preparation for the third quarter, a total of 16 of the hedge funds we track were long in this stock, a change of -41% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
When using filings from the hedgies we track, Tiger Consumer Management, managed by Patrick McCormack, holds the most valuable position in Zynga Inc (NASDAQ:ZNGA). Tiger Consumer Management has a $74.9 million position in the stock, comprising 2.6% of its 13F portfolio. On Tiger Consumer Management’s heels is Invicta Capital Management, managed by Gregory A. Weaver, which held a $25 million position; the fund has 10.4% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Randall Smith’s Alden Global Capital, Tony Chedraoui’s Tyrus Capital and D. E. Shaw’s D E Shaw.
Judging by the fact that Zynga Inc (NASDAQ:ZNGA) has experienced declining interest from the top-tier hedge fund industry, it’s easy to see that there exists a select few money managers that slashed their full holdings at the end of the second quarter. Intriguingly, Barry Rosenstein’s JANA Partners dropped the biggest stake of all the hedgies we watch, comprising about $85.6 million in stock, and Spencer M. Waxman of Shannon River Fund Management was right behind this move, as the fund said goodbye to about $7.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 11 funds at the end of the second quarter.
How are insiders trading Zynga Inc (NASDAQ:ZNGA)?
Insider buying is particularly usable when the company in question has experienced transactions within the past half-year. Over the latest 180-day time period, Zynga Inc (NASDAQ:ZNGA) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Zynga Inc (NASDAQ:ZNGA). These stocks are Sohu.com Inc (NASDAQ:SOHU), ValueClick Inc (NASDAQ:VCLK), AOL, Inc. (NYSE:AOL), Youku Tudou Inc (ADR) (NYSE:YOKU), and HomeAway, Inc. (NASDAQ:AWAY). This group of stocks belong to the internet information providers industry and their market caps match ZNGA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Sohu.com Inc (NASDAQ:SOHU) | 19 | 0 | 0 |
| ValueClick Inc (NASDAQ:VCLK) | 19 | 0 | 9 |
| AOL, Inc. (NYSE:AOL) | 19 | 1 | 4 |
| Youku Tudou Inc (ADR) (NYSE:YOKU) | 17 | 0 | 0 |
| HomeAway, Inc. (NASDAQ:AWAY) | 16 | 0 | 10 |
Using the returns explained by our research, regular investors must always watch hedge fund and insider trading sentiment, and Zynga Inc (NASDAQ:ZNGA) is no exception.
