A. Schulman Inc (NASDAQ:SHLM) was in 11 hedge funds' portfolio at the end of December. SHLM has seen a decrease in activity from the world's largest hedge funds in recent months. There were 12 hedge funds in our database with SHLM positions at the end of the previous quarter.
To the average investor, there are plenty of indicators shareholders can use to watch their holdings. Two of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can outperform the market by a superb margin (see just how much).
Equally as important, optimistic insider trading activity is a second way to parse down the financial markets. Just as you'd expect, there are lots of stimuli for an insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).
Now, it's important to take a look at the latest action surrounding A. Schulman Inc (NASDAQ:SHLM).
At the end of the fourth quarter, a total of 11 of the hedge funds we track held long positions in this stock, a change of -8% from the previous quarter. With hedge funds' sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in A. Schulman Inc (NASDAQ:SHLM). Royce & Associates has a $56 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Daruma Asset Management, managed by Mariko Gordon, which held a $30 million position; 0% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Cliff Asness's AQR Capital Management, David Dreman's Dreman Value Management and Jim Simons's Renaissance Technologies.
Due to the fact that A. Schulman Inc (NASDAQ:SHLM) has experienced bearish sentiment from the smart money, it's safe to say that there lies a certain "tier" of hedge funds that elected to cut their positions entirely at the end of the year. At the top of the heap, Mike Vranos's Ellington cut the largest stake of the 450+ funds we key on, valued at an estimated $1 million in stock.. Mario Gabelli's fund, GAMCO Investors, also dropped its stock, about $1 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds at the end of the year.
Insider buying is most useful when the company in focus has seen transactions within the past 180 days. Over the last half-year time period, A. Schulman Inc (NASDAQ:SHLM) has experienced 1 unique insiders purchasing, and 3 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 A. Schulman Inc (NASDAQ:SHLM). These stocks are Solazyme Inc (NASDAQ:SZYM), FutureFuel Corp. (NYSE:FF), Rentech, Inc. (NYSEAMEX:RTK), Balchem Corporation (NASDAQ:BCPC), and LSB Industries, Inc. (NYSE:LXU). This group of stocks are the members of the chemicals - major diversified industry and their market caps are similar to SHLM's market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Solazyme Inc (NASDAQ:SZYM)||10||2||6|
|FutureFuel Corp. (NYSE:FF)||11||2||0|
|Rentech, Inc. (NYSEAMEX:RTK)||17||0||4|
|Balchem Corporation (NASDAQ:BCPC)||7||1||2|
|LSB Industries, Inc. (NYSE:LXU)||13||0||8|
With the returns exhibited by the aforementioned studies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and A. Schulman Inc (NASDAQ:SHLM) shareholders fit into this picture quite nicely.