XO Group Inc (XOXO): Are Hedge Funds Right About This Stock?

XO Group Inc (NYSE:XOXO) was in 13 hedge funds’ portfolio at the end of March. XOXO has experienced an increase in activity from the world’s largest hedge funds in recent months. There were 11 hedge funds in our database with XOXO positions at the end of the previous quarter.

According to most shareholders, hedge funds are seen as slow, outdated financial tools of the past. While there are greater than 8000 funds trading at the moment, we hone in on the top tier of this group, about 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by tracking their highest performing picks, we have revealed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as important, optimistic insider trading sentiment is a second way to parse down the marketplace. There are a number of incentives for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).

With all of this in mind, we’re going to take a gander at the latest action encompassing XO Group Inc (NYSE:XOXO).

How are hedge funds trading XO Group Inc (NYSE:XOXO)?

Heading into Q2, a total of 13 of the hedge funds we track were bullish in this stock, a change of 18% from one quarter earlier.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the most outsized position in XO Group Inc (NYSE:XOXO). Millennium Management had 0.7 million invested in the company at the end of the quarter. Bruce Silver’s Silver Capital Management LLC also made a $0.5 million investment in the stock during the quarter.

How are insiders trading XO Group Inc (NYSE:XOXO)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time frame, XO Group Inc (NYSE:XOXO) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to XO Group Inc (NYSE:XOXO). These stocks are Zagg Inc (NASDAQ:ZAGG), CSS Industries, Inc. (NYSE:CSS), Odyssey Marine Exploration Inc (NASDAQ:OMEX), TravelCenters of America LLC (NYSEAMEX:TA), and West Marine, Inc. (NASDAQ:WMAR). This group of stocks are in the specialty retail, other industry and their market caps are closest to XOXO’s market cap.

With the returns shown by our studies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and XO Group Inc (NYSE:XOXO) is no exception.

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