Yelp Inc (YELP): You Should Be Watching This Sentiment Gauge

Yelp Inc (NYSE:YELP) was in 9 hedge funds’ portfolio at the end of December. YELP shareholders have witnessed a decrease in hedge fund interest recently. There were 13 hedge funds in our database with YELP holdings at the end of the previous quarter.

Yelp Inc (NYSE:YELP)

To the average investor, there are a multitude of methods market participants can use to monitor publicly traded companies. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the S&P 500 by a healthy margin (see just how much).

Equally as important, bullish insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are a variety of reasons for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).

Now, we’re going to take a look at the recent action encompassing Yelp Inc (NYSE:YELP).

Hedge fund activity in Yelp Inc (NYSE:YELP)

At year’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of -31% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies we track, Joho Capital, managed by Robert Karr, holds the biggest position in Yelp Inc (NYSE:YELP). Joho Capital has a $18.4 million position in the stock, comprising 2.4% of its 13F portfolio. On Joho Capital’s heels is Philippe Laffont of Coatue Management, with a $13.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining peers 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.

Due to the fact that Yelp Inc (NYSE:YELP) has experienced a declination in interest from the entirety of the hedge funds we track, we can see that there is a sect of hedge funds that elected to cut their positions entirely at the end of the year. It’s worth mentioning that Daniel Benton’s Andor Capital Management dumped the biggest position of all the hedgies we key on, comprising about $13.5 million in stock.. SAC Subsidiary’s fund, CR Intrinsic Investors, also dumped its stock, about $4.1 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds at the end of the year.

What do corporate executives and insiders think about Yelp Inc (NYSE:YELP)?

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Yelp Inc (NYSE:YELP) has seen zero unique insiders purchasing, and 15 insider sales (see the details of insider trades here).

Let’s also take a look at 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 in the internet information providers industry and their market caps are similar to YELP’s market cap.