Innophos Holdings, Inc. (IPHS): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

What’s a smart Innophos Holdings, Inc. (NASDAQ:IPHS) investor to do?

If you were to ask many investors, hedge funds are viewed as delayed, outdated financial vehicles of a forgotten age. Although there are over 8,000 hedge funds trading currently, Insider Monkey aim at the leaders of this club, close to 525 funds. It is assumed that this group has its hands on most of the hedge fund industry’s total capital, and by keeping an eye on their highest quality investments, we’ve unearthed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as necessary, optimistic insider trading sentiment is a second way to analyze the investments you’re interested in. As the old adage goes: there are a variety of reasons for an executive to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this method if investors understand what to do (learn more here).

Innophos Holdings, Inc. (NASDAQ:IPHS)

Thus, let’s analyze the latest info surrounding Innophos Holdings, Inc. (NASDAQ:IPHS).

What does the smart money think about Innophos Holdings, Inc. (NASDAQ:IPHS)?

Heading into Q3, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.

When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Innophos Holdings, Inc. (NASDAQ:IPHS). Royce & Associates has a $52.2 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Corsair Capital Management, managed by Jay Petschek and Steven Major, which held a $23.1 million position; the fund has 3% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Because Innophos Holdings, Inc. (NASDAQ:IPHS) has experienced declining interest from upper-tier hedge fund managers, it’s easy to see that there was a specific group of funds that decided to sell off their positions entirely last quarter. Interestingly, Thomas A. Giovine’s Giovine Capital dropped the largest position of all the hedgies we watch, totaling an estimated $4.6 million in stock, and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund dumped about $0.6 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Innophos Holdings, Inc. (NASDAQ:IPHS)?

Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time period, Innophos Holdings, Inc. (NASDAQ:IPHS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Innophos Holdings, Inc. (NASDAQ:IPHS). These stocks are Flotek Industries Inc (NYSE:FTK), Kronos Worldwide, Inc. (NYSE:KRO), WD-40 Company (NASDAQ:WDFC), Koppers Holdings Inc. (NYSE:KOP), and Innospec Inc. (NASDAQ:IOSP). This group of stocks belong to the specialty chemicals industry and their market caps match IPHS’s market cap.