Stamps.com Inc. (NASDAQ:STMP) was in 10 hedge funds’ portfolio at the end of December. STMP has seen an increase in support from the world’s most elite money managers lately. There were 9 hedge funds in our database with STMP positions at the end of the previous quarter.
If you’d ask most market participants, hedge funds are viewed as underperforming, old investment vehicles of years past. While there are greater than 8000 funds in operation today, we at Insider Monkey look at the masters of this club, about 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by paying attention to their highest performing investments, we have discovered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, optimistic insider trading sentiment is another way to break down the financial markets. Just as you’d expect, there are a variety of incentives for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if piggybackers understand what to do (learn more here).
Consequently, let’s take a peek at the latest action encompassing Stamps.com Inc. (NASDAQ:STMP).
How are hedge funds trading Stamps.com Inc. (NASDAQ:STMP)?
In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the third quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, Shannon River Fund Management, managed by Spencer M. Waxman, holds the most valuable position in Stamps.com Inc. (NASDAQ:STMP). Shannon River Fund Management has a $14 million position in the stock, comprising 1.8% of its 13F portfolio. Sitting at the No. 2 spot is Bares Capital Management, managed by Brian Bares, which held a $11 million position; the fund has 2% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Ric Dillon’s Diamond Hill Capital and Chuck Royce’s Royce & Associates.
Now, specific money managers were leading the bulls’ herd. Shannon River Fund Management, managed by Spencer M. Waxman, created the biggest position in Stamps.com Inc. (NASDAQ:STMP). Shannon River Fund Management had 14 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $2 million investment in the stock during the quarter. The other funds with brand new STMP positions are Israel Englander’s Millennium Management, Jeffrey Vinik’s Vinik Asset Management, and Ken Griffin’s Citadel Investment Group.
Insider trading activity in Stamps.com Inc. (NASDAQ:STMP)
Insider buying is particularly usable when the company in focus has experienced transactions within the past six months. Over the last half-year time frame, Stamps.com Inc. (NASDAQ:STMP) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Stamps.com Inc. (NASDAQ:STMP). These stocks are ValueVision Media, Inc. (NASDAQ:VVTV), Vitacost.com, Inc. (NASDAQ:VITC), Overstock.com, Inc. (NASDAQ:OSTK), E Commerce China Dangdang Inc (ADR) (NYSE:DANG), and PC Connection, Inc. (NASDAQ:PCCC). This group of stocks are the members of the catalog & mail order houses industry and their market caps match STMP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| ValueVision Media, Inc. (NASDAQ:VVTV) | 7 | 5 | 0 |
| Vitacost.com, Inc. (NASDAQ:VITC) | 1 | 0 | 0 |
| Overstock.com, Inc. (NASDAQ:OSTK) | 9 | 0 | 5 |
| E Commerce China Dangdang Inc (ADR) (NYSE:DANG) | 3 | 0 | 0 |
| PC Connection, Inc. (NASDAQ:PCCC) | 5 | 0 | 4 |
With the returns demonstrated by Insider Monkey’s time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Stamps.com Inc. (NASDAQ:STMP) is an important part of this process.
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