Is Groupon Inc (NASDAQ:GRPN) the right pick for your portfolio? Investors who are in the know are becoming hopeful. The number of long hedge fund bets inched up by 4 recently.
If you’d ask most market participants, hedge funds are assumed to be slow, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the leaders of this club, close to 450 funds. It is estimated that this group controls the majority of all hedge funds’ total capital, and by paying attention to their best stock picks, we have revealed a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 23.3 percentage points in 8 months (explore the details and some picks here).
Just as important, optimistic insider trading sentiment is another way to parse down the investments you’re interested in. There are a variety of stimuli for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if “monkeys” know what to do (learn more here).
With all of this in mind, let’s take a peek at the recent action regarding Groupon Inc (NASDAQ:GRPN).
How have hedgies been trading Groupon Inc (NASDAQ:GRPN)?
Heading into Q2, a total of 25 of the hedge funds we track held long positions in this stock, a change of 19% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC had the largest position in Groupon Inc (NASDAQ:GRPN), worth close to $397.8 million, comprising 6.2% of its total 13F portfolio. The second largest stake is held by Barry Rosenstein of JANA Partners, with a $134.3 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include John Lykouretzos’s Hoplite Capital Management, Bill Miller’s Legg Mason Capital Management and Pasco Alfaro / Richard Tumure’s Miura Global Management.
As aggregate interest increased, specific money managers have jumped into Groupon Inc (NASDAQ:GRPN) headfirst. JANA Partners, managed by Barry Rosenstein, initiated the most valuable position in Groupon Inc (NASDAQ:GRPN). JANA Partners had 134.3 million invested in the company at the end of the quarter. John Lykouretzos’s Hoplite Capital Management also made a $71.6 million investment in the stock during the quarter. The other funds with brand new GRPN positions are Jim Simons’s Renaissance Technologies, Jeffrey Jon Berney’s TriOaks Capital Management, and Steven Cohen’s SAC Capital Advisors.
Insider trading activity in Groupon Inc (NASDAQ:GRPN)
Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Groupon Inc (NASDAQ:GRPN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Groupon Inc (NASDAQ:GRPN). These stocks are Zynga Inc (NASDAQ:ZNGA), HomeAway, Inc. (NASDAQ:AWAY), Youku Tudou Inc (ADR) (NYSE:YOKU), AOL, Inc. (NYSE:AOL), and IAC/InterActiveCorp (NASDAQ:IACI). This group of stocks are the members of the internet information providers industry and their market caps are similar to GRPN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Zynga Inc (NASDAQ:ZNGA) | 27 | 0 | 9 |
| HomeAway, Inc. (NASDAQ:AWAY) | 21 | 0 | 12 |
| Youku Tudou Inc (ADR) (NYSE:YOKU) | 17 | 0 | 0 |
| AOL, Inc. (NYSE:AOL) | 22 | 0 | 5 |
| IAC/InterActiveCorp (NASDAQ:IACI) | 30 | 0 | 3 |
With the results exhibited by our time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Groupon Inc (NASDAQ:GRPN) applies perfectly to this mantra.
