Is Priceline.com Inc (NASDAQ:PCLN) a healthy stock for your portfolio? Money managers are taking a bearish view. The number of long hedge fund positions shrunk by 9 in recent months.
At the moment, there are tons of gauges investors can use to track publicly traded companies. Some of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outpace the market by a significant margin (see just how much).
Equally as key, bullish insider trading activity is a second way to break down the world of equities. Obviously, there are many 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. Many empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).
Keeping this in mind, let’s take a look at the latest action encompassing Priceline.com Inc (NASDAQ:PCLN).
What does the smart money think about Priceline.com Inc (NASDAQ:PCLN)?
Heading into 2013, a total of 60 of the hedge funds we track were long in this stock, a change of -13% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Lone Pine Capital, managed by Stephen Mandel, holds the biggest position in Priceline.com Inc (NASDAQ:PCLN). Lone Pine Capital has a $1.0987 billion position in the stock, comprising 6.9% of its 13F portfolio. On Lone Pine Capital’s heels is John Griffin of Blue Ridge Capital, with a $343.7 million position; the fund has 4.8% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Philippe Laffont’s Coatue Management, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC and Jim Simons’s Renaissance Technologies.
Due to the fact that Priceline.com Inc (NASDAQ:PCLN) has experienced declining sentiment from the smart money, logic holds that there is a sect of funds that decided to sell off their entire stakes heading into 2013. Intriguingly, Andreas Halvorsen’s Viking Global said goodbye to the biggest investment of the 450+ funds we key on, totaling about $421.4 million in stock.. Rob Citrone’s fund, Discovery Capital Management, also said goodbye to its stock, about $91.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 9 funds heading into 2013.
What have insiders been doing with Priceline.com Inc (NASDAQ:PCLN)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past six months. Over the latest six-month time period, Priceline.com Inc (NASDAQ:PCLN) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Priceline.com Inc (NASDAQ:PCLN). These stocks are MakeMyTrip Limited (NASDAQ:MMYT), Orbitz Worldwide, Inc. (NYSE:OWW), Cedar Fair, L.P. (NYSE:FUN), Six Flags Entertainment Corp (NYSE:SIX), and Carnival plc (ADR) (NYSE:CUK). This group of stocks are the members of the general entertainment industry and their market caps match PCLN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| MakeMyTrip Limited (NASDAQ:MMYT) | 5 | 0 | 0 |
| Orbitz Worldwide, Inc. (NYSE:OWW) | 8 | 0 | 4 |
| Cedar Fair, L.P. (NYSE:FUN) | 10 | 2 | 0 |
| Six Flags Entertainment Corp (NYSE:SIX) | 30 | 1 | 5 |
| Carnival plc (ADR) (NYSE:CUK) | 4 | 0 | 11 |
With the results exhibited by our tactics, everyday investors should always watch hedge fund and insider trading activity, and Priceline.com Inc (NASDAQ:PCLN) is an important part of this process.
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