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Abaxis Inc (ABAX): Hedge Funds and Insiders Are Bearish, What Should You Do?

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Abaxis Inc (NASDAQ:ABAX) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. As an example could serve this morning’s reduction of Abaxis Inc (NASDAQ:ABAX) at Stifel.

According to most market participants, hedge funds are perceived as unimportant, old financial tools of yesteryear. While there are greater than 8000 funds in operation at present, we at Insider Monkey hone in on the aristocrats of this club, about 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total capital, and by tracking their top picks, we have unearthed a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as beneficial, optimistic insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are many incentives for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

With all of this in mind, it’s important to take a peek at the recent action regarding Abaxis Inc (NASDAQ:ABAX).

Hedge fund activity in Abaxis Inc (NASDAQ:ABAX)

In preparation for this year, a total of 5 of the hedge funds we track were bullish in this stock, a change of -29% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly.

Chuck Royce

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Abaxis Inc (NASDAQ:ABAX). Royce & Associates has a $10.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, managed by Jim Simons, which held a $4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions include James Dondero’s Highland Capital Management, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

Because Abaxis Inc (NASDAQ:ABAX) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of funds that decided to sell off their positions entirely in Q4. It’s worth mentioning that Israel Englander’s Millennium Management dropped the largest position of all the hedgies we key on, valued at an estimated $1.7 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $0.4 million worth. These transactions are important to note, as total hedge fund interest fell by 2 funds in Q4.

What do corporate executives and insiders think about Abaxis Inc (NASDAQ:ABAX)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the last half-year time frame, Abaxis Inc (NASDAQ:ABAX) has experienced zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Abaxis Inc (NASDAQ:ABAX). These stocks are AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), Synta Pharmaceuticals Corp. (NASDAQ:SNTA), Quidel Corporation (NASDAQ:QDEL), Neogen Corporation (NASDAQ:NEOG), and Meridian Bioscience, Inc. (NASDAQ:VIVO). This group of stocks are the members of the diagnostic substances industry and their market caps are closest to ABAX’s market cap.

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