Is Groupon Inc (NASDAQ:GRPN) undervalued? The best stock pickers are taking a bearish view. The number of bullish hedge fund bets decreased by 1 in recent months.
To the average investor, there are a multitude of methods shareholders can use to track stocks. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can trounce the market by a superb margin (see just how much).
Just as integral, bullish insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are a number of reasons for an insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this method if piggybackers know what to do (learn more here).
With all of this in mind, it’s important to take a look at the latest action surrounding Groupon Inc (NASDAQ:GRPN).
How are hedge funds trading Groupon Inc (NASDAQ:GRPN)?
Heading into 2013, a total of 18 of the hedge funds we track were long in this stock, a change of -5% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Tiger Global Management LLC, managed by Chase Coleman and Feroz Dewan, holds the most valuable position in Groupon Inc (NASDAQ:GRPN). Tiger Global Management LLC has a $315.9 million position in the stock, comprising 5.9% of its 13F portfolio. Coming in second is Philippe Laffont of Coatue Management, with a $36.4 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers with similar optimism include Bill Miller’s Legg Mason Capital Management, Pasco Alfaro / Richard Tumure’s Miura Global Management and Christopher Lord’s Criterion Capital.
Because Groupon Inc (NASDAQ:GRPN) has faced a declination in interest from the aggregate hedge fund industry, we can see that there exists a select few money managers that elected to cut their entire stakes last quarter. It’s worth mentioning that George Soros’s Soros Fund Management said goodbye to the biggest stake of the 450+ funds we watch, valued at close to $11.9 million in stock., and Christopher Medlock James of Partner Fund Management was right behind this move, as the fund sold off about $1.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.
Insider trading activity in Groupon Inc (NASDAQ:GRPN)
Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Groupon Inc (NASDAQ:GRPN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Groupon Inc (NASDAQ:GRPN). These stocks are Zynga Inc (NASDAQ:ZNGA), HomeAway, Inc. (NASDAQ:AWAY), Youku Tudou Inc (ADR) (NYSE:YOKU), AOL, Inc. (NYSE:AOL), and IAC/InterActiveCorp (NASDAQ:IACI). This group of stocks belong to the internet information providers industry and their market caps match GRPN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Zynga Inc (NASDAQ:ZNGA) | 16 | 1 | 9 |
| HomeAway, Inc. (NASDAQ:AWAY) | 9 | 0 | 13 |
| Youku Tudou Inc (ADR) (NYSE:YOKU) | 14 | 0 | 0 |
| AOL, Inc. (NYSE:AOL) | 19 | 0 | 4 |
| IAC/InterActiveCorp (NASDAQ:IACI) | 22 | 0 | 4 |
With the results exhibited by Insider Monkey’s strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Groupon Inc (NASDAQ:GRPN) applies perfectly to this mantra.
