Ion Geophysical Corp (NYSE:IO) has experienced a decrease in hedge fund interest recently.
According to most investors, hedge funds are seen as worthless, old investment vehicles of the past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the elite of this club, close to 450 funds. It is estimated that this group oversees the majority of the smart money’s total capital, and by watching their highest performing investments, we have brought to light a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, bullish insider trading sentiment is another way to parse down the stock market universe. As the old adage goes: there are a number of reasons for an insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if “monkeys” know where to look (learn more here).
Keeping this in mind, let’s take a look at the key action encompassing Ion Geophysical Corp (NYSE:IO).
What have hedge funds been doing with Ion Geophysical Corp (NYSE:IO)?
Heading into 2013, a total of 12 of the hedge funds we track were long in this stock, a change of -20% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
Of the funds we track, Daruma Asset Management, managed by Mariko Gordon, holds the biggest position in Ion Geophysical Corp (NYSE:IO). Daruma Asset Management has a $44 million position in the stock, comprising 2.6% of its 13F portfolio. Coming in second is Fisher Asset Management, managed by Ken Fisher, which held a $9 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Chuck Royce’s Royce & Associates, John Fichthorn’s Dialectic Capital Management and Israel Englander’s Millennium Management.
Because Ion Geophysical Corp (NYSE:IO) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers who sold off their full holdings last quarter. Interestingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest investment of the 450+ funds we track, comprising about $1 million in stock., and Douglas W. Case of Advanced Investment Partners was right behind this move, as the fund dropped about $1 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds last quarter.
How are insiders trading Ion Geophysical Corp (NYSE:IO)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time frame, Ion Geophysical Corp (NYSE:IO) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Ion Geophysical Corp (NYSE:IO). These stocks are MTS Systems Corporation (NASDAQ:MTSC), Analogic Corporation (NASDAQ:ALOG), Cubic Corporation (NYSE:CUB), ESCO Technologies Inc. (NYSE:ESE), and II-VI, Inc. (NASDAQ:IIVI). This group of stocks are the members of the scientific & technical instruments industry and their market caps are similar to IO’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|MTS Systems Corporation (NASDAQ:MTSC)||11||0||3|
|Analogic Corporation (NASDAQ:ALOG)||14||0||3|
|Cubic Corporation (NYSE:CUB)||10||0||1|
|ESCO Technologies Inc. (NYSE:ESE)||7||0||2|
|II-VI, Inc. (NASDAQ:IIVI)||10||0||3|
With the results demonstrated by the aforementioned studies, everyday investors must always monitor hedge fund and insider trading activity, and Ion Geophysical Corp (NYSE:IO) is no exception.
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