Multimedia Games Holding Company Inc (NASDAQ:MGAM): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

Multimedia Games Holding Company Inc (NASDAQ:MGAM) has experienced a decrease in hedge fund interest lately.

According to most stock holders, hedge funds are perceived as slow, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation today, we choose to focus on the top tier of this club, about 450 funds. It is estimated that this group controls most of the hedge fund industry’s total capital, and by paying attention to their highest performing picks, we have identified a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Equally as key, optimistic insider trading activity is a second way to parse down the investments you’re interested in. There are a number of incentives for an executive to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this strategy if piggybackers understand what to do (learn more here).

Consequently, it’s important to take a gander at the latest action surrounding Multimedia Games Holding Company Inc (NASDAQ:MGAM).

Hedge fund activity in Multimedia Games Holding Company Inc (NASDAQ:MGAM)

At year’s end, a total of 15 of the hedge funds we track held long positions in this stock, a change of -6% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, Jim Simons’s Renaissance Technologies had the most valuable position in Multimedia Games Holding Company Inc (NASDAQ:MGAM), worth close to $16 million, accounting for 0% of its total 13F portfolio. The second largest stake is held by Driehaus Capital, managed by Richard Driehaus, which held a $11 million position; 1% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Joseph A. Jolson’s Harvest Capital Strategies, Robert B. Gillam’s McKinley Capital Management and Cliff Asness’s AQR Capital Management.

Since Multimedia Games Holding Company Inc (NASDAQ:MGAM) has witnessed a declination in interest from hedge fund managers, it’s easy to see that there was a specific group of hedgies who sold off their entire stakes last quarter. At the top of the heap, Israel Englander’s Millennium Management dumped the largest stake of the 450+ funds we watch, worth close to $1 million in stock.. Louis Navellier’s fund, Navellier & Associates, also cut its stock, about $0 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.

How are insiders trading Multimedia Games Holding Company Inc (NASDAQ:MGAM)?

Insider buying is at its handiest when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, Multimedia Games Holding Company Inc (NASDAQ:MGAM) has experienced 1 unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

With the results exhibited by our studies, retail investors must always watch hedge fund and insider trading activity, and Multimedia Games Holding Company Inc (NASDAQ:MGAM) applies perfectly to this mantra.

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