Is US Ecology Inc. (NASDAQ:ECOL) ready to rally soon? Money managers are in a bullish mood. The number of long hedge fund positions inched up by 5 lately.
In the eyes of most shareholders, hedge funds are assumed to be slow, old investment vehicles of years past. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the masters of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by monitoring their highest performing investments, we have deciphered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, optimistic insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are lots of motivations for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this tactic if shareholders understand what to do (learn more here).
Now, we’re going to take a glance at the latest action encompassing US Ecology Inc. (NASDAQ:ECOL).
Hedge fund activity in US Ecology Inc. (NASDAQ:ECOL)
Heading into Q2, a total of 12 of the hedge funds we track held long positions in this stock, a change of 71% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the largest position in US Ecology Inc. (NASDAQ:ECOL). Renaissance Technologies has a $3.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Israel Englander of Millennium Management, with a $2.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include D. E. Shaw’s D E Shaw, Chuck Royce’s Royce & Associates and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, some big names have jumped into US Ecology Inc. (NASDAQ:ECOL) headfirst. Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, created the most outsized position in US Ecology Inc. (NASDAQ:ECOL). Bryn Mawr Capital had 0.3 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new ECOL investors: Steven Cohen’s SAC Capital Advisors, Cliff Asness’s AQR Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How have insiders been trading US Ecology Inc. (NASDAQ:ECOL)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time period, US Ecology Inc. (NASDAQ:ECOL) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to US Ecology Inc. (NASDAQ:ECOL). These stocks are Darling International Inc. (NYSE:DAR), Casella Waste Systems Inc. (NASDAQ:CWST), TRC Companies, Inc. (NYSE:TRR), Heckmann Corporation (NYSE:HEK), and EnergySolutions, Inc. (NYSE:ES). This group of stocks belong to the waste management industry and their market caps are similar to ECOL’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Darling International Inc. (NYSE:DAR)||16||0||1|
|Casella Waste Systems Inc. (NASDAQ:CWST)||14||2||0|
|TRC Companies, Inc. (NYSE:TRR)||1||0|
|Heckmann Corporation (NYSE:HEK)||11||0||0|
|EnergySolutions, Inc. (NYSE:ES)||15||0||0|
With the results demonstrated by the aforementioned studies, retail investors should always keep an eye on hedge fund and insider trading activity, and US Ecology Inc. (NASDAQ:ECOL) is an important part of this process.