Is Majesco Entertainment Co. (NASDAQ:COOL) a bargain? Investors who are in the know are becoming more confident. The number of bullish hedge fund positions rose by 1 in recent months.
If you’d ask most shareholders, hedge funds are seen as worthless, outdated investment vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the moguls of this club, around 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by keeping an eye on their top stock picks, we have identified a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as beneficial, bullish insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the recent action encompassing Majesco Entertainment Co. (NASDAQ:COOL).
How have hedgies been trading Majesco Entertainment Co. (NASDAQ:COOL)?
At the end of the fourth quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 14% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably.
As industrywide interest jumped, specific money managers were breaking ground themselves. GRT Capital Partners, managed by Gregory Fraser, Rudolph Kluiber, and Timothy Kroch, assembled the biggest position in Majesco Entertainment Co. (NASDAQ:COOL). GRT Capital Partners had 0.1 million invested in the company at the end of the quarter.
How are insiders trading Majesco Entertainment Co. (NASDAQ:COOL)?
Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Majesco Entertainment Co. (NASDAQ:COOL) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Majesco Entertainment Co. (NASDAQ:COOL). These stocks are GigaMedia Limited (NASDAQ:GIGM), Gravity Co., LTD. (ADR) (NASDAQ:GRVY), and MakeMusic, Inc. (NASDAQ:MMUS). This group of stocks are in the multimedia & graphics software industry and their market caps match COOL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| GigaMedia Limited (NASDAQ:GIGM) | 2 | 1 | 0 |
| Gravity Co., LTD. (ADR) (NASDAQ:GRVY) | 1 | 0 | 0 |
| MakeMusic, Inc. (NASDAQ:MMUS) | 2 | 0 | 1 |
With the returns exhibited by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Majesco Entertainment Co. (NASDAQ:COOL) shareholders fit into this picture quite nicely.