Should You Buy Stamps.com Inc. (STMP)?
If you were to ask many market players, hedge funds are seen as bloated, outdated financial tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey focuses on the elite of this club, about 525 funds. Analysts calculate that this group oversees the lion's share of the hedge fund industry's total assets, and by watching their best equity investments, we've brought to light a number of 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 a year 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, optimistic insider trading sentiment is another way to look at the investments you're interested in. There are a variety of incentives for an executive to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).
Now that that's out of the way, we're going to examine the newest info for Stamps.com Inc. (NASDAQ:STMP).
How have hedgies been trading Stamps.com Inc. (NASDAQ:STMP)?
At Q2's end, a total of 12 of the hedge funds we track held long positions in this stock, a change of 20% from the previous quarter. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings significantly.
Out of the hedge funds we follow, Renaissance Technologies, managed by Jim Simons, holds the largest position in Stamps.com Inc. (NASDAQ:STMP). Renaissance Technologies has a $18.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is Diamond Hill Capital, managed by Ric Dillon, which held a $8.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Spencer M. Waxman's Shannon River Fund Management, D. E. Shaw's D E Shaw and Matthew Hulsizer's PEAK6 Capital Management.
Consequently, particular hedge funds have jumped into Stamps.com Inc. (NASDAQ:STMP) headfirst. Renaissance Technologies, managed by Jim Simons, created the largest position in Stamps.com Inc. (NASDAQ:STMP). Renaissance Technologies had 18.4 million invested in the company at the end of the quarter. Ric Dillon's Diamond Hill Capital also made a $8.7 million investment in the stock during the quarter. The other funds with brand new STMP positions are Spencer M. Waxman's Shannon River Fund Management, D. E. Shaw's D E Shaw, and Matthew Hulsizer's PEAK6 Capital Management.
How have insiders been trading Stamps.com Inc. (NASDAQ:STMP)?
Insider buying is best served when the company in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Stamps.com Inc. (NASDAQ:STMP) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators 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 belong to the catalog & mail order houses industry and their market caps are similar to STMP's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
ValueVision Media, Inc. (NASDAQ:VVTV)
Vitacost.com, Inc. (NASDAQ:VITC)
Overstock.com, Inc. (NASDAQ:OSTK)
E Commerce China Dangdang Inc (ADR) (NYSE:DANG)
PC Connection, Inc. (NASDAQ:PCCC)
Using the results demonstrated by Insider Monkey's research, regular investors should always watch hedge fund and insider trading sentiment, and Stamps.com Inc. (NASDAQ:STMP) is no exception.