Is it smart to be bullish on Syneron Medical Ltd. (NASDAQ:ELOS)?
Now, according to many investors, hedge funds are viewed as delayed, outdated investment tools of an era lost to time. Although there are more than 8,000 hedge funds trading currently, Insider Monkey aim at the elite of this group, close to 525 funds. Analysts calculate that this group controls the majority of the smart money's total capital, and by paying attention to their highest quality equity investments, we've found a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced 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 outclassed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as necessary, bullish insider trading sentiment is another way to look at the stock market universe. As the old adage goes: there are plenty of incentives for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this method if "monkeys" know what to do (learn more here).
Keeping this in mind, we're going to study the newest info about Syneron Medical Ltd. (NASDAQ:ELOS).
In preparation for the third quarter, a total of 12 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With the smart money's sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings considerably.
Since Syneron Medical Ltd. (NASDAQ:ELOS) has experienced dropping sentiment from the smart money's best and brightest, it's easy to see that there is a sect of hedge funds that decided to sell off their full holdings at the end of the second quarter. Interestingly, Samuel Isaly's OrbiMed Advisors sold off the largest investment of the 450+ funds we watch, comprising close to $3.6 million in stock. Neil Chriss's fund, Hutchin Hill Capital, also cut its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 1 funds at the end of the second quarter.
Insider buying made by high-level executives is best served when the company in question has experienced transactions within the past six months. Over the last 180-day time period, Syneron Medical Ltd. (NASDAQ:ELOS) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Syneron Medical Ltd. (NASDAQ:ELOS). These stocks are GenMark Diagnostics, Inc (NASDAQ:GNMK), Navidea Biopharmaceuticals Inc (NYSEAMEX:NAVB), Natus Medical Inc (NASDAQ:BABY), PhotoMedex Inc (NASDAQ:PHMD), and Accuray Incorporated (NASDAQ:ARAY). This group of stocks are the members of the medical appliances & equipment industry and their market caps resemble ELOS's market cap.