Is Stamps.com Inc. (NASDAQ:STMP) worth your attention right now? Money managers are getting more optimistic. The number of bullish hedge fund positions rose by 1 recently.
According to most market participants, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we hone in on the masters of this club, close to 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total capital, and by watching their best equity investments, we have come up with a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped 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 the details here).
Just as key, bullish insider trading activity is another way to break down the marketplace. There are lots of stimuli for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Consequently, let’s take a peek at the latest action encompassing Stamps.com Inc. (NASDAQ:STMP).
How have hedgies been trading Stamps.com Inc. (NASDAQ:STMP)?
Heading into 2013, a total of 10 of the hedge funds we track held long positions in this stock, a change of 11% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Shannon River Fund Management, managed by Spencer M. Waxman, holds the biggest position in Stamps.com Inc. (NASDAQ:STMP). Shannon River Fund Management has a $13.8 million position in the stock, comprising 1.8% of its 13F portfolio. Sitting at the No. 2 spot is Brian Bares of Bares Capital Management, with a $11.3 million position; the fund has 2% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Ric Dillon’s Diamond Hill Capital and Chuck Royce’s Royce & Associates.
Now, some big names have been driving this bullishness. Shannon River Fund Management, managed by Spencer M. Waxman, created the most valuable position in Stamps.com Inc. (NASDAQ:STMP). Shannon River Fund Management had 13.8 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also initiated a $1.8 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Jeffrey Vinik’s Vinik Asset Management, and Ken Griffin’s Citadel Investment Group.
What have insiders been doing with Stamps.com Inc. (NASDAQ:STMP)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past 180 days. Over the last six-month time period, Stamps.com Inc. (NASDAQ:STMP) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Stamps.com Inc. (NASDAQ:STMP). These stocks are ValueVision Media, Inc. (NASDAQ:VVTV), Vitacost.com, Inc. (NASDAQ:VITC), Overstock.com, Inc. (NASDAQ:OSTK), E Commerce China Dangdang Inc (ADR) (NYSE:DANG), and PC Connection, Inc. (NASDAQ:PCCC). This group of stocks are in the catalog & mail order houses industry and their market caps resemble STMP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| ValueVision Media, Inc. (NASDAQ:VVTV) | 7 | 5 | 0 |
| Vitacost.com, Inc. (NASDAQ:VITC) | 1 | 0 | 0 |
| Overstock.com, Inc. (NASDAQ:OSTK) | 9 | 0 | 5 |
| E Commerce China Dangdang Inc (ADR) (NYSE:DANG) | 3 | 0 | 0 |
| PC Connection, Inc. (NASDAQ:PCCC) | 5 | 0 | 4 |
With the returns shown by Insider Monkey’s research, everyday investors should always pay attention to hedge fund and insider trading activity, and Stamps.com Inc. (NASDAQ:STMP) shareholders fit into this picture quite nicely.
