Is SunOpta, Inc. (USA) (NASDAQ:STKL) the right investment to pursue these days? Investors who are in the know are selling. The number of long hedge fund positions shrunk by 2 recently.
To most market participants, hedge funds are assumed to be slow, outdated financial vehicles of the past. While there are over 8000 funds trading at the moment, we look at the top tier of this group, about 450 funds. It is widely believed that this group has its hands on the lion's share of the smart money's total asset base, and by monitoring their highest performing investments, we have deciphered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 (check out a sample of our picks).
Just as integral, optimistic insider trading sentiment is another way to parse down the investments you're interested in. Obviously, there are lots of motivations for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this method if piggybackers know where to look (learn more here).
Consequently, we're going to take a gander at the recent action encompassing SunOpta, Inc. (USA) (NASDAQ:STKL).
Heading into Q2, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from the previous quarter. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, West Face Capital, managed by Greg Boland, holds the most valuable position in SunOpta, Inc. (USA) (NASDAQ:STKL). West Face Capital has a $55.5 million position in the stock, comprising 10.2% of its 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $4.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and Jim Simons's Renaissance Technologies.
Judging by the fact that SunOpta, Inc. (USA) (NASDAQ:STKL) has experienced a declination in interest from hedge fund managers, logic holds that there exists a select few funds that decided to sell off their full holdings heading into Q2. Intriguingly, Mark N. Diker's Diker Management dumped the biggest stake of the 450+ funds we monitor, totaling close to $0.3 million in stock.. Steven Cohen's fund, SAC Capital Advisors, also sold off its stock, about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q2.
Insider buying is best served when the company in question has seen transactions within the past half-year. Over the last half-year time frame, SunOpta, Inc. (USA) (NASDAQ:STKL) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns shown by our time-tested strategies, everyday investors must always monitor hedge fund and insider trading activity, and SunOpta, Inc. (USA) (NASDAQ:STKL) is no exception.