Facebook Inc (NASDAQ:FB), after a less-than-stellar IPO in spring of 2012 and a rough first six months on the markets, where the share prie plunged to half o f its IPO price of $38, has rallied nicely in the year since, most recently getting within the ballpark of $50 a share 0 a nearly 33-percent rise from the IPO. And its photo-sharing subsidiary, Instagram, announced this week a launch event set for next Thursday, Dec. 12, in Manhattan. There is no word yet on what this event is about, but speculation is that Instagram may launch its own messaging service to complement Facebook Inc (NASDAQ:FB)’s own Messenger application – except this may be focused solely on photos. This would be consistent with the recent buzz surrounding Facebook Inc in general, especially those in the hedge-fund and insider-trading communities. What might this buzz mean for the stock?
Facebook Inc (NASDAQ:FB) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months.
What have hedge funds been doing with Facebook Inc?
Coming out of the third quarter, 96 of the hedge funds tracked by our friends at Insider Monkey were long in this stock, a change of 100% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies that Insider Monkey monitors, D. E. Shaw’s D E Shaw had the most valuable position in Facebook Inc (NASDAQ:FB), worth close to $550.5 million, comprising 0.9 percent of its total 13F portfolio. Coming in second is Philippe Laffont of Coatue Management, with a $464.3-million position, which is 4.7 percent of his portfolio. Other hedgies that are bullish include William B. Gray’s Orbis Investment Management, Stephen Mandel’s Lone Pine Capital and Rob Citrone’s Discovery Capital Management.
As aggregate interest increased, key money managers were leading the bulls’ herd. Coatue Management, managed by Philippe Laffont, assembled the largest position in Facebook Inc (NASDAQ:FB). Coatue Management had $464.3 million invested in the company at the end of the quarter. William B. Gray’s Orbis Investment Management also made a $440.4-million investment in the stock during the quarter. The other funds with brand new FB positions are Rob Citrone’s Discovery Capital Management, Andreas Halvorsen’s Viking Global and Daniel Benton’s Andor Capital Management.
What do insiders think about Facebook Inc?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time period, Facebook Inc (NASDAQ:FB) has seen zero unique insiders buying, and eight insider sales (see the details of insider trades here).
Let’s also examine hedge-fund and insider activity in other stocks similar to Facebook Inc (NASDAQ:FB). These stocks are Yandex NV (NASDAQ:YNDX), Google Inc (NASDAQ:GOOG), LinkedIn Corp (NYSE:LNKD), Yahoo! Inc. (NASDAQ:YHOO) and Baidu.com, Inc. (ADR) (NASDAQ:BIDU). This group of stocks is in the internet information providers industry and their market caps are closest to FB’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Yandex NV (NASDAQ:YNDX)||30||0||0|
|Google Inc (NASDAQ:GOOG)||139||0||7|
|LinkedIn Corp (NYSE:LNKD)||56||0||13|
|Yahoo! Inc. (NASDAQ:YHOO)||68||0||4|
|Baidu.com, Inc. (ADR) (NASDAQ:BIDU)||53||0||0|
As one can see from the chart, Facebook Inc (NASDAQ:FB) is the second-most held stock in this group behind Google Inc (NASDAQ:GOOG) and is second in insider transactions behind only LinkedIn Corp (NYSE:LNKD). With the results shown by our time-tested strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Facebook Inc (NASDAQ:FB) shareholders fit into this picture quite nicely.