Is Amazon.com, Inc. (AMZN) Going to Burn These Hedge Funds?

Is Amazon.com, Inc. (NASDAQ:AMZN) a buy, sell, or hold? Prominent investors are betting on the stock. The number of long hedge fund bets moved up by 6 in recent months.

To the average investor, there are tons of indicators shareholders can use to track Mr. Market. A duo of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can beat the market by a very impressive amount (see just how much).

Just as important, bullish insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are a variety of reasons for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).

With all of this in mind, it’s important to take a glance at the latest action encompassing Amazon.com, Inc. (NASDAQ:AMZN).

Hedge fund activity in Amazon.com, Inc. (NASDAQ:AMZN)

At Q1’s end, a total of 70 of the hedge funds we track were bullish in this stock, a change of 9% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Ken Fisher’s Fisher Asset Management had the most valuable position in Amazon.com, Inc. (NASDAQ:AMZN), worth close to $640.2 million, accounting for 1.7% of its total 13F portfolio. The second largest stake is held by Paul Ruddock and Steve Heinz of Lansdowne Partners, with a $496.2 million position; 6.8% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, Steven Cohen’s SAC Capital Advisors and Rob Citrone’s Discovery Capital Management.

As aggregate interest increased, key hedge funds have jumped into Amazon.com, Inc. (NASDAQ:AMZN) headfirst. Scout Capital Management, managed by James Crichton and Adam Weiss, initiated the most outsized position in Amazon.com, Inc. (NASDAQ:AMZN). Scout Capital Management had 199.9 million invested in the company at the end of the quarter. Donald Chiboucis’s Columbus Circle Investors also initiated a $103.3 million position during the quarter. The other funds with new positions in the stock are Daniel Benton’s Andor Capital Management, John Wu’s Sureview Capital, and John Burbank’s Passport Capital.

What have insiders been doing with Amazon.com, Inc. (NASDAQ:AMZN)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time period, Amazon.com, Inc. (NASDAQ:AMZN) has seen zero unique insiders buying, and 13 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Amazon.com, Inc. (NASDAQ:AMZN). These stocks are PC Connection, Inc. (NASDAQ:PCCC), Liquidity Services, Inc. (NASDAQ:LQDT), Mercadolibre Inc (NASDAQ:MELI), Liberty Interactive (Interactive group) (NASDAQ:LINTA), and eBay Inc (NASDAQ:EBAY). This group of stocks are the members of the catalog & mail order houses industry and their market caps match AMZN’s market cap.

With the results demonstrated by the aforementioned time-tested strategies, retail investors must always watch hedge fund and insider trading activity, and Amazon.com, Inc. (NASDAQ:AMZN) applies perfectly to this mantra.

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