Yelp Inc (YELP), ValueClick Inc (VCLK): This Metric Says You Are Smart to Buy Inc (SOHU)

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Is Inc (NASDAQ:SOHU) a buy, sell, or hold? Investors who are in the know are getting more bullish. The number of long hedge fund positions advanced by 3 in recent months.

In the eyes of most shareholders, hedge funds are perceived as unimportant, old financial tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the elite of this group, about 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total capital, and by tracking their best picks, we have formulated a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here). Inc (NASDAQ:SOHU)

Just as important, positive insider trading sentiment is a second way to parse down the investments you’re interested in. As the old adage goes: there are plenty of motivations for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the key action regarding Inc (NASDAQ:SOHU).

What does the smart money think about Inc (NASDAQ:SOHU)?

At year’s end, a total of 15 of the hedge funds we track held long positions in this stock, a change of 25% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, Orbis Investment Management, managed by William B. Gray, holds the biggest position in Inc (NASDAQ:SOHU). Orbis Investment Management has a $358 million position in the stock, comprising 3.6% of its 13F portfolio. Sitting at the No. 2 spot is Kerr Neilson of Platinum Asset Management, with a $114 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Thomas E. Claugus’s GMT Capital, Cliff Asness’s AQR Capital Management and Daniel S. Och’s OZ Management.

Now, some big names were breaking ground themselves. OZ Management, managed by Daniel S. Och, created the most valuable position in Inc (NASDAQ:SOHU). OZ Management had 10 million invested in the company at the end of the quarter. Eric Semler’s TCS Capital Management also initiated a $4 million position during the quarter. The other funds with brand new SOHU positions are Mike Vranos’s Ellington, Bruce Kovner’s Caxton Associates LP, and Glenn Russell Dubin’s Highbridge Capital Management.

Insider trading activity in Inc (NASDAQ:SOHU)

Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time period, Inc (NASDAQ:SOHU) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Inc (NASDAQ:SOHU). These stocks are Yelp Inc (NYSE:YELP), Kayak Software Corp (NASDAQ:KYAK), ValueClick Inc (NASDAQ:VCLK), Shutterfly, Inc. (NASDAQ:SFLY), and InterXion Holding NV (NYSE:INXN). This group of stocks are the members of the internet information providers industry and their market caps are similar to SOHU’s market cap.

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