Endologix, Inc. (NASDAQ:ELGX) investors should pay attention to a decrease in hedge fund sentiment lately.
In the eyes of most investors, hedge funds are perceived as worthless, old financial tools of yesteryear. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the upper echelon of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total asset base, and by paying attention to their top equity investments, we have brought to light a number of investment strategies that have historically outperformed the S&P 500 index. 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as beneficial, bullish insider trading sentiment is another way to parse down the marketplace. There are a variety of stimuli for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if piggybackers understand what to do (learn more here).
With these “truths” under our belt, let’s take a gander at the latest action regarding Endologix, Inc. (NASDAQ:ELGX).
What have hedge funds been doing with Endologix, Inc. (NASDAQ:ELGX)?
At year’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of -25% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly.
Seeing as Endologix, Inc. (NASDAQ:ELGX) has faced a declination in interest from hedge fund managers, it’s easy to see that there were a few money managers who were dropping their positions entirely at the end of the year. At the top of the heap, Jacob Gottlieb’s Visium Asset Management dumped the biggest stake of all the hedgies we key on, totaling an estimated $4 million in stock., and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk of GRT Capital Partners was right behind this move, as the fund dumped about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds at the end of the year.
What have insiders been doing with Endologix, Inc. (NASDAQ:ELGX)?
Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest 180-day time period, Endologix, Inc. (NASDAQ:ELGX) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
With the returns shown by Insider Monkey’s strategies, retail investors should always watch hedge fund and insider trading activity, and Endologix, Inc. (NASDAQ:ELGX) is no exception.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.