ENGlobal Corp (NASDAQ:ENG) was in 4 hedge funds’ portfolio at the end of December. ENG has seen a decrease in enthusiasm from smart money lately; in our experience, stagnant sentiment is a bearish development. There were 4 hedge funds in our database with ENG positions at the end of the previous quarter.
In the eyes of most investors, hedge funds are viewed as slow, old investment vehicles of the past. While there are over 8000 funds trading today, we at Insider Monkey look at the crème de la crème of this club, close to 450 funds. It is estimated that this group controls the majority of all hedge funds’ total asset base, and by tracking their best equity investments, we have discovered a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as beneficial, bullish insider trading sentiment is another way to parse down the marketplace. There are a variety of motivations for an executive to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).
With all of this in mind, it’s important to take a gander at the recent action encompassing ENGlobal Corp (NASDAQ:ENG).
How have hedgies been trading ENGlobal Corp (NASDAQ:ENG)?
At year’s end, a total of 4 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter.
Seeing as ENGlobal Corp (NASDAQ:ENG) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds that elected to cut their full holdings at the end of the year. Intriguingly, Phil Frohlich’s Prescott Group Capital Management said goodbye to the largest investment of the “upper crust” of funds we key on, worth an estimated $0.2 million in stock. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with ENGlobal Corp (NASDAQ:ENG)?
Insider buying is best served when the company in focus has seen transactions within the past half-year. Over the last six-month time period, ENGlobal Corp (NASDAQ:ENG) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to ENGlobal Corp (NASDAQ:ENG). These stocks are UniTek Global Services Inc. (NASDAQ:UNTK), Versar Inc. (NYSEAMEX:VSR), WidePoint Corporation (NYSEAMEX:WYY), and Lime Energy Co. (NASDAQ:LIME). This group of stocks are in the technical services industry and their market caps resemble ENG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| UniTek Global Services Inc. (NASDAQ:UNTK) | 1 | 5 | 1 |
| Versar Inc. (NYSEAMEX:VSR) | 4 | 3 | 0 |
| WidePoint Corporation (NYSEAMEX:WYY) | 2 | 0 | 0 |
| Lime Energy Co. (NASDAQ:LIME) | 2 | 0 | 0 |
With the results shown by our research, retail investors should always pay attention to hedge fund and insider trading sentiment, and ENGlobal Corp (NASDAQ:ENG) is no exception.
