Is Zoltek Companies, Inc. (NASDAQ:ZOLT) a buy right now? The smart money is in a bearish mood. The number of long hedge fund positions fell by 2 in recent months.
To the average investor, there are tons of gauges shareholders can use to monitor the equity markets. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the market by a very impressive margin (see just how much).
Just as beneficial, bullish insider trading activity is another way to break down the stock market universe. Obviously, there are plenty of incentives for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the valuable potential of this tactic if shareholders understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the latest action encompassing Zoltek Companies, Inc. (NASDAQ:ZOLT).
What have hedge funds been doing with Zoltek Companies, Inc. (NASDAQ:ZOLT)?
At Q1’s end, a total of 8 of the hedge funds we track were long in this stock, a change of -20% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in Zoltek Companies, Inc. (NASDAQ:ZOLT), worth close to $19.5 million, comprising 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Scoggin, managed by Curtis Schenker and Craig Effron, which held a $17.1 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group, and Daniel S. Och’s OZ Management.
Because Zoltek Companies, Inc. (NASDAQ:ZOLT) has faced a declination in interest from the entirety of the hedge funds we track, we can see that there were a few money managers that elected to cut their full holdings in Q1. It’s worth mentioning that Thomas E. Claugus’s GMT Capital dropped the biggest position of the “upper crust” of funds we key on, valued at an estimated $3.1 million in stock.. Jim Simons’s fund, Renaissance Technologies, also cut its stock, about $1.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 2 funds in Q1.
What have insiders been doing with Zoltek Companies, Inc. (NASDAQ:ZOLT)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past six months. Over the last 180-day time period, Zoltek Companies, Inc. (NASDAQ:ZOLT) has seen 2 unique insiders purchasing, 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 Zoltek Companies, Inc. (NASDAQ:ZOLT). These stocks are Capstone Turbine Corporation (NASDAQ:CPST), Electro Scientific Industries, Inc. (NASDAQ:ESIO), Ameresco Inc (NYSE:AMRC), Preformed Line Products Company (NASDAQ:PLPC), and Daktronics, Inc. (NASDAQ:DAKT). This group of stocks belong to the industrial electrical equipment industry and their market caps resemble ZOLT’s market cap.