Is Electronic Arts Inc. (NASDAQ:EA) a great investment today? The best stock pickers are becoming more confident. The number of long hedge fund bets inched up by 8 lately.
At the moment, there are a multitude of indicators shareholders can use to monitor Mr. Market. A pair of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can trounce the S&P 500 by a very impressive amount (see just how much).
Just as beneficial, positive insider trading activity is another way to break down the financial markets. Obviously, there are lots of reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).
With these “truths” under our belt, let’s take a look at the latest action encompassing Electronic Arts Inc. (NASDAQ:EA).
How are hedge funds trading Electronic Arts Inc. (NASDAQ:EA)?
In preparation for this quarter, a total of 33 of the hedge funds we track held long positions in this stock, a change of 32% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Glenview Capital, managed by Larry Robbins, holds the biggest position in Electronic Arts Inc. (NASDAQ:EA). Glenview Capital has a $145.7 million position in the stock, comprising 1.5% of its 13F portfolio. On Glenview Capital’s heels is Michael Kaufman of MAK Capital One, with a $67.2 million position; 10.7% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Peter Adam Hochfelder’s Brahman Capital, Curtis Macnguyen’s Ivory Capital (Investment Mgmt) and Kerr Neilson’s Platinum Asset Management.
Now, some big names have been driving this bullishness. Brahman Capital, managed by Peter Adam Hochfelder, assembled the most outsized call position in Electronic Arts Inc. (NASDAQ:EA). Brahman Capital had 56.6 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital also initiated a $18.9 million position during the quarter. The following funds were also among the new EA investors: Malcolm Fairbairn’s Ascend Capital, Dmitry Balyasny’s Balyasny Asset Management, and Leon Cooperman’s Omega Advisors.
What do corporate executives and insiders think about Electronic Arts Inc. (NASDAQ:EA)?
Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, Electronic Arts Inc. (NASDAQ:EA) has seen 1 unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Electronic Arts Inc. (NASDAQ:EA). These stocks are Cornerstone OnDemand, Inc. (NASDAQ:CSOD), Activision Blizzard, Inc. (NASDAQ:ATVI), Rovi Corporation (NASDAQ:ROVI), and International Game Technology (NYSE:IGT). This group of stocks belong to the multimedia & graphics software industry and their market caps are closest to EA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Cornerstone OnDemand, Inc. (NASDAQ:CSOD) | 15 | 0 | 10 |
| Activision Blizzard, Inc. (NASDAQ:ATVI) | 34 | 0 | 1 |
| Rovi Corporation (NASDAQ:ROVI) | 18 | 0 | 2 |
| International Game Technology (NYSE:IGT) | 26 | 2 | 1 |
With the returns exhibited by the aforementioned time-tested strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Electronic Arts Inc. (NASDAQ:EA) applies perfectly to this mantra.
