Here is What Hedge Funds Think About eLong, Inc. (ADR) (LONG)

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Hedge fund interest in eLong, Inc. (ADR) (NASDAQ:LONG) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as MINDBODY Inc (NASDAQ:MB), Performance Sports Group Ltd (NYSE:PSG), and Patrick Industries, Inc. (NASDAQ:PATK) to gather more data points.

With all of this in mind, let’s take a peek at the recent action regarding eLong, Inc. (ADR) (NASDAQ:LONG).

Hedge fund activity in eLong, Inc. (ADR) (NASDAQ:LONG)

Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Parag Vora’s HG Vora Capital Management has the number one position in eLong, Inc. (ADR) (NASDAQ:LONG), worth close to $28.9 million, comprising 3.5% of its total 13F portfolio. On HG Vora Capital Management’s heels is QVT Financial, led by Daniel Gold, holding a $8.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism encompass Brad Gerstner’s Altimeter Capital Management, and Michael R. Weisberg’s Crestwood Capital Management.

At the top of the heap, Brian Jackelow’s SAB Capital Management sold off the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $5.3 million in stock, and Jim Simons’s Renaissance Technologies was right behind this move, as the fund dropped about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to eLong, Inc. (ADR) (NASDAQ:LONG). We will take a look at MINDBODY Inc (NASDAQ:MB), Performance Sports Group Ltd (NYSE:PSG), Patrick Industries, Inc. (NASDAQ:PATK), and Pier 1 Imports, Inc. (NYSE:PIR). This group of stocks’ market valuations are closest to LONG’s market valuation.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $47 million in LONG’s case. Pier 1 Imports, Inc. (NYSE:PIR) is the most popular stock in this table. On the other hand MINDBODY Inc (NASDAQ:MB) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks eLong, Inc. (ADR) (NASDAQ:LONG) is even less popular than MB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.