Zagg Inc (NASDAQ:ZAGG) investors should pay attention to a decrease in hedge fund sentiment recently.
If you’d ask most investors, hedge funds are perceived as underperforming, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the crème de la crème of this club, about 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry’s total asset base, and by paying attention to their highest performing equity investments, we have deciphered a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as important, optimistic insider trading activity is a second way to break down the financial markets. There are plenty of reasons for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).
With all of this in mind, let’s take a gander at the recent action regarding Zagg Inc (NASDAQ:ZAGG).
Hedge fund activity in Zagg Inc (NASDAQ:ZAGG)
In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Alden Global Capital, managed by Randall Smith, holds the biggest position in Zagg Inc (NASDAQ:ZAGG). Alden Global Capital has a $6.5 million position in the stock, comprising 1.1% of its 13F portfolio. On Alden Global Capital’s heels is Gotham Asset Management, managed by Joel Greenblatt, which held a $1.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Israel Englander’s Millennium Management, Neil Chriss’s Hutchin Hill Capital and Ken Griffin’s Citadel Investment Group.
Since Zagg Inc (NASDAQ:ZAGG) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedge funds who were dropping their full holdings heading into 2013. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management dropped the largest stake of the 450+ funds we monitor, valued at close to $3.2 million in stock.. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also cut its stock, about $3 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).Hedge Funds Are Selling Zagg Inc (NASDAQ:ZAGG)
Insider trading activity in Zagg Inc (NASDAQ:ZAGG)
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Zagg Inc (NASDAQ:ZAGG) has seen zero unique insiders buying, 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 Zagg Inc (NASDAQ:ZAGG). These stocks are TravelCenters of America LLC (NYSEAMEX:TA), West Marine, Inc. (NASDAQ:WMAR), XO Group Inc (NYSE:XOXO), Odyssey Marine Exploration Inc (NASDAQ:OMEX), and CSS Industries, Inc. (NYSE:CSS). This group of stocks are in the specialty retail, other industry and their market caps match ZAGG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| TravelCenters of America LLC (NYSEAMEX:TA) | 8 | 0 | 0 |
| West Marine, Inc. (NASDAQ:WMAR) | 7 | 0 | 4 |
| XO Group Inc (NYSE:XOXO) | 10 | 0 | 2 |
| Odyssey Marine Exploration Inc (NASDAQ:OMEX) | 6 | 1 | 1 |
| CSS Industries, Inc. (NYSE:CSS) | 4 | 1 | 3 |
With the returns exhibited by Insider Monkey’s research, retail investors must always monitor hedge fund and insider trading sentiment, and Zagg Inc (NASDAQ:ZAGG) is no exception.
