Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD) investors should pay attention to a decrease in hedge fund sentiment in recent months.
In today’s marketplace, there are a multitude of methods market participants can use to watch stocks. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outclass their index-focused peers by a superb margin (see just how much).
Just as integral, bullish insider trading sentiment is a second way to parse down the financial markets. Just as you’d expect, there are lots of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this method if piggybackers understand what to do (learn more here).
Keeping this in mind, let’s take a glance at the latest action encompassing Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD).
What does the smart money think about Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD)?
At the end of the first quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of -14% from the first 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, Renaissance Technologies, managed by Jim Simons, holds the largest position in Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD). Renaissance Technologies has a $16 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Two Sigma Advisors, managed by John Overdeck and David Siegel, which held a $2.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Brian Taylor’s Pine River Capital Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Due to the fact that Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of funds that elected to cut their positions entirely in Q1. Interestingly, Matthew Hulsizer’s PEAK6 Capital Management dropped the biggest position of the 450+ funds we watch, worth about $0.5 million in call options, and Jeffrey Altman of Owl Creek Asset Management was right behind this move, as the fund sold off about $0.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds in Q1.
What do corporate executives and insiders think about Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD)?
Bullish insider trading is best served when the company in focus has seen transactions within the past six months. Over the last half-year time frame, Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD). These stocks are Glu Mobile Inc. (NASDAQ:GLUU), Avid Technology, Inc. (NASDAQ:AVID), KongZhong Corporation (ADR) (NASDAQ:KONG), Rosetta Stone Inc (NYSE:RST), and Shanda Games Limited(ADR) (NASDAQ:GAME). This group of stocks are the members of the multimedia & graphics software industry and their market caps resemble PWRD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Glu Mobile Inc. (NASDAQ:GLUU) | 5 | 0 | 1 |
| Avid Technology, Inc. (NASDAQ:AVID) | 11 | 1 | 0 |
| KongZhong Corporation (ADR) (NASDAQ:KONG) | 3 | 0 | 0 |
| Rosetta Stone Inc (NYSE:RST) | 10 | 1 | 6 |
| Shanda Games Limited(ADR) (NASDAQ:GAME) | 5 | 0 | 0 |
With the returns demonstrated by the aforementioned strategies, everyday investors must always monitor hedge fund and insider trading activity, and Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD) is an important part of this process.
