This Metric Says You Are Smart to Buy Glu Mobile Inc. (GLUU)

Glu Mobile Inc. (NASDAQ:GLUU): do you own it, or are you considering owning it? This article’s for you.

Now, according to many market players, hedge funds are seen as useless, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds trading today, Insider Monkey focuses on the elite of this club, close to 525 funds. It is widely held that this group controls most of the smart money’s total assets, and by monitoring their best equity investments, we’ve uncovered a number of investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outstripped 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as crucial, positive insider trading sentiment is another way to look at the financial markets. Just as you’d expect, there are a variety of incentives for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if investors know where to look (learn more here).

Thus, it’s important to discuss the latest info for Glu Mobile Inc. (NASDAQ:GLUU).

How have hedgies been trading Glu Mobile Inc. (NASDAQ:GLUU)?

At the end of the second quarter, a total of 7 of the hedge funds we track were bullish in this stock, a change of 40% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.

When using filings from the hedgies we track, Archon Capital Management, managed by Constantinos J. Christofilis, holds the most valuable position in Glu Mobile Inc. (NASDAQ:GLUU). Archon Capital Management has a $2.5 million position in the stock, comprising 1.1% of its 13F portfolio. On Archon Capital Management’s heels is Cannell Capital, managed by J. Carlo Cannell, which held a $1.4 million position; 0.8% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group.

Now, certain bigger names have jumped into Glu Mobile Inc. (NASDAQ:GLUU) headfirst. Archon Capital Management, managed by Constantinos J. Christofilis, established the most outsized position in Glu Mobile Inc. (NASDAQ:GLUU). Archon Capital Management had 2.5 million invested in the company at the end of the quarter. J. Carlo Cannell’s Cannell Capital also made a $1.4 million investment in the stock during the quarter. The following funds were also among the new GLUU investors: Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group.

Insider trading activity in Glu Mobile Inc. (NASDAQ:GLUU)

Insider buying is at its handiest when the company in question has experienced transactions within the past six months. Over the latest six-month time period, Glu Mobile Inc. (NASDAQ:GLUU) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Glu Mobile Inc. (NASDAQ:GLUU). These stocks are The9 Limited (ADR) (NASDAQ:NCTY), Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD), Rosetta Stone Inc (NYSE:RST), KongZhong Corporation (ADR) (NASDAQ:KONG), and Avid Technology, Inc. (NASDAQ:AVID). This group of stocks belong to the multimedia & graphics software industry and their market caps match GLUU’s market cap.

Using the results explained by our strategies, average investors should always pay attention to hedge fund and insider trading activity, and Glu Mobile Inc. (NASDAQ:GLUU) shareholders fit into this picture quite nicely.

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