J2 Global Inc (NASDAQ:JCOM) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. JCOM has experienced an increase in hedge fund interest of late. There were 6 hedge funds in our database with JCOM positions at the end of the previous quarter.
If you’d ask most stock holders, hedge funds are assumed to be worthless, old financial vehicles of years past. While there are more than 8000 funds with their doors open at present, we look at the masters of this group, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by watching their highest performing stock picks, we have formulated a few investment strategies that have historically outstripped Mr. Market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, positive insider trading activity is another way to parse down the stock market universe. Obviously, there are plenty of stimuli for an upper level exec to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if “monkeys” understand what to do (learn more here).
Keeping this in mind, let’s take a peek at the key action encompassing J2 Global Inc (NASDAQ:JCOM).
What does the smart money think about J2 Global Inc (NASDAQ:JCOM)?
In preparation for this year, a total of 10 of the hedge funds we track were bullish in this stock, a change of 67% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Amy Minella’s Cardinal Capital had the largest position in J2 Global Inc (NASDAQ:JCOM), worth close to $48 million, accounting for 3.3% of its total 13F portfolio. On Cardinal Capital’s heels is Jim Simons of Renaissance Technologies, with a $19.1 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Joel Greenblatt’s Gotham Asset Management, Ken Griffin’s Citadel Investment Group and Chuck Royce’s Royce & Associates.
As industrywide interest jumped, some big names were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the largest position in J2 Global Inc (NASDAQ:JCOM). Two Sigma Advisors had 0.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.3 million position during the quarter. The other funds with brand new JCOM positions are Cliff Asness’s AQR Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners.
How are insiders trading J2 Global Inc (NASDAQ:JCOM)?
Insider buying is most useful when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, J2 Global Inc (NASDAQ:JCOM) has experienced zero unique insiders purchasing, and 5 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 J2 Global Inc (NASDAQ:JCOM). These stocks are The Ultimate Software Group, Inc. (NASDAQ:ULTI), Angie’s List Inc (NASDAQ:ANGI), DealerTrack Technologies Inc (NASDAQ:TRAK), and ExactTarget Inc (NYSE:ET). All of these stocks are in the internet software & services industry and their market caps are similar to JCOM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| The Ultimate Software Group, Inc. (NASDAQ:ULTI) | 10 | 0 | 6 |
| Angie’s List Inc (NASDAQ:ANGI) | 9 | 0 | 6 |
| DealerTrack Technologies Inc (NASDAQ:TRAK) | 9 | 0 | 8 |
| ExactTarget Inc (NYSE:ET) | 9 | 2 | 17 |
With the results shown by Insider Monkey’s time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and J2 Global Inc (NASDAQ:JCOM) is an important part of this process.
