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Hedge Funds Are Dumping Landec Corporation (LNDC): Arabian American Development Co (ARSD), Rentech, Inc. (RTK)

Landec Corporation (NASDAQ:LNDC) was in 9 hedge funds’ portfolio at the end of December. LNDC investors should pay attention to a decrease in enthusiasm from smart money recently. There were 10 hedge funds in our database with LNDC holdings at the end of the previous quarter.

Landec Corporation (NASDAQ:LNDC)

At the moment, there are plenty of metrics investors can use to watch publicly traded companies. Some of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the S&P 500 by a very impressive margin (see just how much).

Just as integral, bullish insider trading sentiment is another way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of reasons 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. Several empirical studies have demonstrated the valuable potential of this method if investors understand what to do (learn more here).

With all of this in mind, let’s take a gander at the key action regarding Landec Corporation (NASDAQ:LNDC).

How have hedgies been trading Landec Corporation (NASDAQ:LNDC)?

At the end of the fourth quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, Nelson Obus’s Wynnefield Capital had the most valuable position in Landec Corporation (NASDAQ:LNDC), worth close to $20 million, comprising 6.9% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $3 million position; 0% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include John W. Rogers’s Ariel Investments, Israel Englander’s Millennium Management and Robert B. Gillam’s McKinley Capital Management.

Seeing as Landec Corporation (NASDAQ:LNDC) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of fund managers who sold off their entire stakes in Q4. Interestingly, Richard Driehaus’s Driehaus Capital cut the largest position of the 450+ funds we track, totaling close to $1 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund cut about $0 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds in Q4.

What do corporate executives and insiders think about Landec Corporation (NASDAQ:LNDC)?

Insider trading activity, especially when it’s bullish, is most useful when the company in question has seen transactions within the past half-year. Over the last six-month time period, Landec Corporation (NASDAQ:LNDC) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Landec Corporation (NASDAQ:LNDC). These stocks are Arabian American Development Co (NYSE:ARSD), Rentech, Inc. (NYSEAMEX:RTK), FutureFuel Corp. (NYSE:FF), Solazyme Inc (NASDAQ:SZYM), and Aceto Corporation (NASDAQ:ACET). This group of stocks are in the chemicals – major diversified industry and their market caps are closest to LNDC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Arabian American Development Co (NYSE:ARSD) 1 1 0
Rentech, Inc. (NYSEAMEX:RTK) 17 0 4
FutureFuel Corp. (NYSE:FF) 11 2 0
Solazyme Inc (NASDAQ:SZYM) 10 2 6
Aceto Corporation (NASDAQ:ACET) 3 0 5

With the returns demonstrated by Insider Monkey’s strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Landec Corporation (NASDAQ:LNDC) applies perfectly to this mantra.

Click here to learn why you should track hedge funds

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