Bankrate Inc (NYSE:RATE) was in 5 hedge funds’ portfolio at the end of December. RATE shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 9 hedge funds in our database with RATE positions at the end of the previous quarter.
In the eyes of most investors, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are over 8000 funds trading today, we at Insider Monkey look at the crème de la crème of this group, close to 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry’s total asset base, and by monitoring their top stock picks, we have unsheathed a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as beneficial, optimistic insider trading activity is another way to break down the world of equities. Obviously, there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a look at the latest action regarding Bankrate Inc (NYSE:RATE).
What have hedge funds been doing with Bankrate Inc (NYSE:RATE)?
At the end of the fourth quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of -44% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the largest position in Bankrate Inc (NYSE:RATE), worth close to $43.4 million, comprising 0.1% of its total 13F portfolio. On Citadel Investment Group’s heels is Chuck Royce of Royce & Associates, with a $21.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include James A. Noonan’s Pivot Point Capital, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Because Bankrate Inc (NYSE:RATE) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there were a few fund managers who sold off their positions entirely heading into 2013. Intriguingly, Lee Ainslie’s Maverick Capital dumped the biggest investment of all the hedgies we track, totaling an estimated $9.4 million in stock.. Israel Englander’s fund, Millennium Management, also cut its stock, about $6.1 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds heading into 2013.
How are insiders trading Bankrate Inc (NYSE:RATE)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time frame, Bankrate Inc (NYSE:RATE) has experienced 2 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Bankrate Inc (NYSE:RATE). These stocks are InterXion Holding NV (NYSE:INXN), Shutterfly, Inc. (NASDAQ:SFLY), Kayak Software Corp (NASDAQ:KYAK), Yelp Inc (NYSE:YELP), and OpenTable Inc (NASDAQ:OPEN). This group of stocks are in the internet information providers industry and their market caps are similar to RATE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| InterXion Holding NV (NYSE:INXN) | 19 | 0 | 0 |
| Shutterfly, Inc. (NASDAQ:SFLY) | 14 | 0 | 9 |
| Kayak Software Corp (NASDAQ:KYAK) | 8 | 0 | 0 |
| Yelp Inc (NYSE:YELP) | 9 | 0 | 15 |
| OpenTable Inc (NASDAQ:OPEN) | 17 | 0 | 4 |
With the returns demonstrated by the aforementioned research, retail investors should always watch hedge fund and insider trading activity, and Bankrate Inc (NYSE:RATE) shareholders fit into this picture quite nicely.
