Facebook Inc (FB): How Are The Bears Trading It?

Nowadays, there are tons of metrics for Facebook Inc (NASDAQ:FB) investors to keep an eye on, but it’s absolutely crucial to monitor a stock’s short interest. Some indicators typically used are: (a) the percentage of a stock’s float that bears are presently selling, and (b) the difference in short selling activity.

Increased shorting usually means what you’d think: the market’s big players have grown less fond of a company. Overselling, though, may have a bullish effect on stock price, as short sellers can be forced to cover their shares.

Here at Insider Monkey, it is no secret that we pay attention to hedge fund sentiment, but it is also beneficial to group this information with aggregate short sale information. A few, mega- players could disclose that they’re short on a company, but it is not an SEC requirement. Nonetheless, some individual players may wish to avoid highly shorted stocks with high hedge fund support, while others may want short-squeeze plays. For investors searching for a proven piggybacking strategy, discover the details of our premium strategy.

With that in mind, let’s take a glance at the latest data swirling around Facebook Inc (NASDAQ:FB).

Looking at the latest FINRA short interest data, which is reported two times a month, we can see that Facebook Inc (NASDAQ:FB) has a short interest of 1.60% of float, a moderate drop from one month earlier. With a float of 1.48B shares, this is a short ratio of 0.80.

It is also crucial to monitor hedge fund sentiment via their 13F forms. When analyzing the funds we track, D E Shaw, managed by D. E. Shaw, holds the largest position in Facebook Inc (NASDAQ:FB). D E Shaw has a $194.5 million position in the stock, comprising 0.5% of its 13F portfolio. On D E Shaw’s heels is Columbus Circle Investors, managed by Donald Chiboucis, which held a $154.6 million position; 1.2% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Leon Cooperman’s Omega Advisors and Patrick McCormack’s Tiger Consumer Management.

Also, insider buying is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Facebook Inc (NASDAQ:FB) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s also review activity in other stocks similar to Facebook Inc (NASDAQ:FB). These stocks are Yandex NV (NASDAQ:YNDX), Google Inc (NASDAQ:GOOG), LinkedIn Corp (NYSE:LNKD), Yahoo! Inc. (NASDAQ:YHOO), and Baidu.com, Inc. (ADR) (NASDAQ:BIDU). This group of stocks belong to the internet information providers industry and their market caps are closest to FB’s market cap.

These three tools–short interest info, hedge fund holdings and insiders’ behavior–are what all investors should track. Though it is difficult to formulate a practical strategy from short selling information, hedge fund and insider sentiment provide lots of market beating opportunities if you know where to look.