HomeAway, Inc. (NASDAQ:AWAY) was in 9 hedge funds’ portfolio at the end of December. AWAY has experienced an increase in enthusiasm from smart money of late. There were 6 hedge funds in our database with AWAY positions at the end of the previous quarter. We’ll also compare it to some of its key peers, like AOL, Inc. (NYSE:AOL) and Zynga Inc (NASDAQ:ZNGA).
According to most market participants, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are over 8000 funds in operation at the moment, we look at the moguls of this club, around 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by monitoring their top stock picks, we have unearthed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as important, bullish insider trading sentiment is another way to break down the marketplace. Just as you’d expect, there are a number of motivations for an insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this method if you understand where to look (learn more here).
Consequently, let’s take a look at the recent action encompassing HomeAway, Inc. (NASDAQ:AWAY).
How have hedgies been trading HomeAway, Inc. (NASDAQ:AWAY)?
At year’s end, a total of 9 of the hedge funds we track were long in this stock, a change of 50% from the third quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, SAC Subsidiary’s Sigma Capital Management had the largest position in HomeAway, Inc. (NASDAQ:AWAY), worth close to $22 million, accounting for 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Dorsal Capital Management, managed by Ryan Frick and Oliver Evans, which held a $14 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Chuck Royce’s Royce & Associates, SAC Subsidiary’s CR Intrinsic Investors and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Sigma Capital Management, managed by SAC Subsidiary, assembled the most outsized position in HomeAway, Inc. (NASDAQ:AWAY). Sigma Capital Management had 22 million invested in the company at the end of the quarter. Ryan Frick and Oliver Evans’s Dorsal Capital Management also initiated a $14 million position during the quarter. The other funds with brand new AWAY positions are SAC Subsidiary’s CR Intrinsic Investors, Israel Englander’s Millennium Management, and James Dondero’s Highland Capital Management.
How are insiders trading HomeAway, Inc. (NASDAQ:AWAY)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the last 180-day time period, HomeAway, Inc. (NASDAQ:AWAY) has experienced zero unique insiders buying, and 13 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to HomeAway, Inc. (NASDAQ:AWAY). These stocks are IAC/InterActiveCorp (NASDAQ:IACI), ValueClick Inc (NASDAQ:VCLK), AOL, Inc. (NYSE:AOL), Zynga Inc (NASDAQ:ZNGA), and Youku Tudou Inc (ADR) (NYSE:YOKU). All of these stocks are in the internet information providers industry and their market caps are closest to AWAY’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|ValueClick Inc (NASDAQ:VCLK)||16||0||9|
|AOL, Inc. (NYSE:AOL)||19||0||4|
|Zynga Inc (NASDAQ:ZNGA)||16||1||9|
|Youku Tudou Inc (ADR) (NYSE:YOKU)||14||0||0|
With the returns exhibited by our strategies, retail investors should always watch hedge fund and insider trading activity, and HomeAway, Inc. (NASDAQ:AWAY) shareholders fit into this picture quite nicely.