ENGlobal Corp (NASDAQ:ENG) shareholders have witnessed stagnant enthusiasm from smart money lately.
To the average investor, there are tons of indicators market participants can use to monitor stocks. A couple of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outclass their index-focused peers by a very impressive amount (see just how much).
Equally as important, bullish insider trading sentiment is a second way to break down the stock market universe. As the old adage goes: there are a number of motivations for an insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand what to do (learn more here).
Keeping this in mind, we’re going to take a peek at the recent action surrounding ENGlobal Corp (NASDAQ:ENG).
What does the smart money think about ENGlobal Corp (NASDAQ:ENG)?
Heading into 2013, a total of 4 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds’ sentiment swirling, there was a specific group of funds who were dropping their full holdings last quarter. At the top of the heap, Phil Frohlich’s Prescott Group Capital Management dumped the largest investment of the “upper crust” of funds we monitor, totaling close to $0.2 million in stock. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in ENGlobal Corp (NASDAQ:ENG)
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, ENGlobal Corp (NASDAQ:ENG) has seen zero 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 ENGlobal Corp (NASDAQ:ENG). These stocks are UniTek Global Services Inc. (NASDAQ:UNTK), Versar Inc. (NYSEAMEX:VSR), WidePoint Corporation (NYSEAMEX:WYY), and Lime Energy Co. (NASDAQ:LIME). This group of stocks are in the technical services industry and their market caps resemble ENG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| UniTek Global Services Inc. (NASDAQ:UNTK) | 1 | 5 | 1 |
| Versar Inc. (NYSEAMEX:VSR) | 4 | 3 | 0 |
| WidePoint Corporation (NYSEAMEX:WYY) | 2 | 0 | 0 |
| Lime Energy Co. (NASDAQ:LIME) | 2 | 0 | 0 |
With the returns demonstrated by the aforementioned studies, retail investors should always pay attention to hedge fund and insider trading sentiment, and ENGlobal Corp (NASDAQ:ENG) is no exception.