Fuel Tech Inc. (NASDAQ:FTEK) was in 6 hedge funds’ portfolio at the end of March. FTEK shareholders have witnessed a decrease in hedge fund interest of late. There were 6 hedge funds in our database with FTEK positions at the end of the previous quarter.
If you’d ask most market participants, hedge funds are seen as slow, outdated financial tools of years past. While there are greater than 8000 funds in operation at present, we at Insider Monkey hone in on the masters of this group, around 450 funds. It is estimated that this group controls the majority of the smart money’s total capital, and by keeping an eye on their best equity investments, we have brought to light a few investment strategies that have historically outpaced the S&P 500 index. 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 23.3 percentage points in 8 months (see the details here).
Equally as important, optimistic insider trading activity is a second way to parse down the world of equities. Obviously, there are a number of stimuli for an insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this method if investors understand where to look (learn more here).
With all of this in mind, it’s important to take a gander at the recent action regarding Fuel Tech Inc. (NASDAQ:FTEK).
What have hedge funds been doing with Fuel Tech Inc. (NASDAQ:FTEK)?
Heading into Q2, a total of 6 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly.
Of the funds we track, Philip Hempleman’s Ardsley Partners had the most valuable position in Fuel Tech Inc. (NASDAQ:FTEK), worth close to $0.5 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Ken Griffin’s Citadel Investment Group.
Due to the fact that Fuel Tech Inc. (NASDAQ:FTEK) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there were a few funds that elected to cut their full holdings last quarter. It’s worth mentioning that Gregory Fraser Rudolph Kluiber and Timothy Krochuk’s GRT Capital Partners cut the largest position of the 450+ funds we monitor, valued at an estimated $0.1 million in stock.. Phil Frohlich’s fund, Prescott Group Capital Management, also dropped its stock, about $0 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Fuel Tech Inc. (NASDAQ:FTEK)
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Fuel Tech Inc. (NASDAQ:FTEK) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Fuel Tech Inc. (NASDAQ:FTEK). These stocks are Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), ADA-ES, Inc. (NASDAQ:ADES), CECO Environmental Corp. (NASDAQ:CECE), Energy Recovery, Inc. (NASDAQ:ERII), and MFRI, Inc. (NASDAQ:MFRI). All of these stocks are in the pollution & treatment controls industry and their market caps are similar to FTEK’s market cap.