This Metric Says You Are Smart to Sell Electronic Arts Inc. (NASDAQ:EA)

Electronic Arts Inc. (NASDAQ:EA) was in 24 hedge funds’ portfolio at the end of December. EA investors should be aware of a decrease in activity from the world’s largest hedge funds recently. There were 28 hedge funds in our database with EA positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of metrics shareholders can use to track publicly traded companies. A duo of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outclass the market by a very impressive margin (see just how much).

Equally as important, optimistic insider trading activity is a second way to parse down the stock market universe. Obviously, there are a number of reasons for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this method if you understand where to look (learn more here).

With all of this in mind, we’re going to take a look at the recent action encompassing Electronic Arts Inc. (NASDAQ:EA).

What does the smart money think about Electronic Arts Inc. (NASDAQ:EA)?

Heading into 2013, a total of 24 of the hedge funds we track were long in this stock, a change of -14% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully.

When looking at the hedgies we track, Larry Robbins’s Glenview Capital had the largest position in Electronic Arts Inc. (NASDAQ:EA), worth close to $118 million billion, accounting for 1.7% of its total 13F portfolio. Coming in second is Platinum Asset Management, managed by Kerr Neilson, which held a $76 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Michael Kaufman’s MAK Capital One, Dan Loeb’s Third Point and D. E. Shaw’s D E Shaw.

Due to the fact that Electronic Arts Inc. (NASDAQ:EA) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of hedge funds that slashed their positions entirely in Q4. It’s worth mentioning that Jim Simons’s Renaissance Technologies said goodbye to the biggest position of the 450+ funds we track, valued at about $35 million in stock.. Ray Dalio’s fund, Bridgewater Associates, also sold off its stock, about $15 million worth. These transactions are interesting, as total hedge fund interest dropped by 4 funds in Q4.

Insider trading activity in Electronic Arts Inc. (NASDAQ:EA)

Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the latest six-month time period, Electronic Arts Inc. (NASDAQ:EA) has experienced 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).

With the results exhibited by Insider Monkey’s studies, everyday investors must always watch hedge fund and insider trading sentiment, and Electronic Arts Inc. (NASDAQ:EA) shareholders fit into this picture quite nicely.

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