Calavo Growers, Inc. (CVGW): Hedge Funds and Insiders Are Bearish, What Should You Do?

Is Calavo Growers, Inc. (NASDAQ:CVGW) a superb investment now? Hedge funds are getting less optimistic. The number of long hedge fund bets fell by 2 recently.

At the moment, there are many methods shareholders can use to monitor publicly traded companies. A couple of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outpace the S&P 500 by a healthy margin (see just how much).

Calavo Growers, Inc. (NASDAQ:CVGW)

Equally as key, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are plenty of stimuli for an executive to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action regarding Calavo Growers, Inc. (NASDAQ:CVGW).

Hedge fund activity in Calavo Growers, Inc. (NASDAQ:CVGW)

At year’s end, a total of 5 of the hedge funds we track held long positions in this stock, a change of -29% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, Cardinal Capital, managed by Amy Minella, holds the largest position in Calavo Growers, Inc. (NASDAQ:CVGW). Cardinal Capital has a $16.7 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $2.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, Joseph A. Jolson’s Harvest Capital Strategies and Jim Simons’s Renaissance Technologies.

Due to the fact that Calavo Growers, Inc. (NASDAQ:CVGW) has experienced a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of fund managers who were dropping their entire stakes heading into 2013. Interestingly, Mike Vranos’s Ellington dumped the biggest investment of the 450+ funds we key on, totaling about $0.6 million in stock.. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $0.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 2 funds heading into 2013.

How have insiders been trading Calavo Growers, Inc. (NASDAQ:CVGW)?

Insider buying is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time frame, Calavo Growers, Inc. (NASDAQ:CVGW) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Calavo Growers, Inc. (NASDAQ:CVGW). These stocks are Adecoagro SA (NYSE:AGRO), Limoneira Company (NASDAQ:LMNR), Alico, Inc. (NASDAQ:ALCO), Chiquita Brands International, Inc. (NYSE:CQB), and Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY). This group of stocks are in the farm products industry and their market caps are closest to CVGW’s market cap.