Is Syntroleum Corp (NASDAQ:SYNM) the right investment to pursue these days? Prominent investors are getting less optimistic. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
If you’d ask most shareholders, hedge funds are assumed to be worthless, outdated investment tools of years past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the bigwigs of this group, around 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by tracking their highest performing equity investments, we have deciphered 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 per 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 trumped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as integral, optimistic insider trading activity is another way to break down the stock market universe. Obviously, there are a number of reasons for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this strategy if you understand where to look (learn more here).
Consequently, let’s take a look at the recent action encompassing Syntroleum Corp (NASDAQ:SYNM).
What does the smart money think about Syntroleum Corp (NASDAQ:SYNM)?
At year’s end, a total of 4 of the hedge funds we track were long in this stock, a change of 0% from the third quarter.
Due to the fact that Syntroleum Corp (NASDAQ:SYNM) has witnessed a declination in interest from the smart money, it’s easy to see that there were a few hedge funds that elected to cut their entire stakes heading into 2013. Interestingly, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners sold off the biggest investment of all the hedgies we watch, valued at close to $0.1 million in stock. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Syntroleum Corp (NASDAQ:SYNM)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time period, Syntroleum Corp (NASDAQ:SYNM) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Syntroleum Corp (NASDAQ:SYNM). These stocks are Crosstex Energy Inc (NASDAQ:XTXI), KiOR Inc (NASDAQ:KIOR), Renewable Energy Group Inc (NASDAQ:REGI), and Adams Resources & Energy Inc (NYSEAMEX:AE). All of these stocks are in the oil & gas refining & marketing industry and their market caps are closest to SYNM’s market cap.