In the financial world, there are tons of metrics shareholders can use to analyze Mr. Market. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can trounce the market by a superb margin (see just how much).
Just as necessary, bullish insider trading sentiment is a second way to look at the marketplace. As the old adage goes: there are a number of motivations for an executive to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
Now that that's out of the way, we're going to examine the newest info surrounding ArthroCare Corporation (NASDAQ:ARTC).
At the end of the second quarter, a total of 23 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.
According to our 13F database, Arthur B Cohen and Joseph Healey's Healthcor Management LP had the biggest position in ArthroCare Corporation (NASDAQ:ARTC), worth close to $77.7 million, comprising 4.7% of its total 13F portfolio. Coming in second is SAC Capital Advisors, managed by Steven Cohen, which held a $25.9 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Sean Cullinan's Point State Capital, Jim Simons's Renaissance Technologies and Mario Gabelli's GAMCO Investors.
As ArthroCare Corporation (NASDAQ:ARTC) has experienced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there was a specific group of fund managers that elected to cut their positions entirely at the end of the second quarter. Interestingly, Peter Kolchinsky's RA Capital Management said goodbye to the biggest stake of the 450+ funds we monitor, valued at close to $13.5 million in stock. William Leland Edwards's fund, Palo Alto Investors, also said goodbye to its stock, about $9.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Legal insider trading, particularly when it's bullish, is at its handiest when the company in question has seen transactions within the past six months. Over the latest half-year time frame, ArthroCare Corporation (NASDAQ:ARTC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to ArthroCare Corporation (NASDAQ:ARTC). These stocks are Volcano Corporation (NASDAQ:VOLC), Masimo Corporation (NASDAQ:MASI), NuVasive, Inc. (NASDAQ:NUVA), Wright Medical Group Inc (NASDAQ:WMGI), and CONMED Corporation (NASDAQ:CNMD). This group of stocks belong to the medical appliances & equipment industry and their market caps match ARTC's market cap.