Is Yelp Inc (NYSE:YELP) an attractive investment now? The best stock pickers are in a pessimistic mood. The number of long hedge fund bets shrunk by 4 in recent months.
At the moment, there are plenty of gauges market participants can use to analyze stocks. A couple of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outpace the S&P 500 by a superb amount (see just how much).
Equally as beneficial, positive insider trading sentiment is a second way to parse down the financial markets. Just as you’d expect, there are a number of reasons for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).
Keeping this in mind, let’s take a gander at the recent action surrounding Yelp Inc (NYSE:YELP).
What have hedge funds been doing with Yelp Inc (NYSE:YELP)?
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Robert Karr’s Joho Capital had the biggest position in Yelp Inc (NYSE:YELP), worth close to $18.4 million, comprising 2.4% of its total 13F portfolio. The second largest stake is held by Coatue Management, managed by Philippe Laffont, which held a $13.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Drew Cupps’s Cupps Capital Management, Robert Pitts’s Steadfast Capital Management and Scott Fine and Peter Richards’s Empire Capital Management.
Since Yelp Inc (NYSE:YELP) has faced bearish sentiment from hedge fund managers, we can see that there was a specific group of hedgies who were dropping their full holdings last quarter. It’s worth mentioning that Daniel Benton’s Andor Capital Management dumped the largest investment of the “upper crust” of funds we track, comprising about $13.5 million in stock., and SAC Subsidiary of CR Intrinsic Investors was right behind this move, as the fund dropped about $4.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds last quarter.
How are insiders trading Yelp Inc (NYSE:YELP)?
Insider buying is at its handiest when the company in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Yelp Inc (NYSE:YELP) has seen zero unique insiders buying, and 15 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Yelp Inc (NYSE:YELP). These stocks are Sohu.com Inc (NASDAQ:SOHU), InterXion Holding NV (NYSE:INXN), Shutterfly, Inc. (NASDAQ:SFLY), OpenTable Inc (NASDAQ:OPEN), and Kayak Software Corp (NASDAQ:KYAK). This group of stocks are the members of the internet information providers industry and their market caps resemble YELP’s market cap.