Is Cleveland BioLabs, Inc. (CBLI) Going to Burn These Hedge Funds?

Cleveland BioLabs, Inc. (NASDAQ:CBLI) has experienced an increase in hedge fund sentiment in recent months.

According to most investors, hedge funds are perceived as slow, old investment vehicles of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the bigwigs of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by monitoring their top equity investments, we have found a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

RENAISSANCE TECHNOLOGIESJust as important, positive insider trading activity is a second way to break down the financial markets. As the old adage goes: there are a number of incentives for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if you understand what to do (learn more here).

Keeping this in mind, let’s take a look at the recent action encompassing Cleveland BioLabs, Inc. (NASDAQ:CBLI).

What have hedge funds been doing with Cleveland BioLabs, Inc. (NASDAQ:CBLI)?

At the end of the first quarter, a total of 7 of the hedge funds we track were long in this stock, a change of 40% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.

According to our comprehensive database, Phil Frohlich’s Prescott Group Capital Management had the largest position in Cleveland BioLabs, Inc. (NASDAQ:CBLI), worth close to $2.1 million, comprising 0.5% of its total 13F portfolio. On Prescott Group Capital Management’s heels is Goodnow Investment Group, managed by Edward Goodnow, which held a $1.1 million position; 0.2% of its 13F portfolio is allocated to the company. Other peers that are bullish include Paul Tanico’s Castlerock Asset Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

Now, some big names were breaking ground themselves. Castlerock Asset Management, managed by Paul Tanico, initiated the largest position in Cleveland BioLabs, Inc. (NASDAQ:CBLI). Castlerock Asset Management had 0.6 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $0.1 million investment in the stock during the quarter.

Insider trading activity in Cleveland BioLabs, Inc. (NASDAQ:CBLI)

Bullish insider trading is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time frame, Cleveland BioLabs, Inc. (NASDAQ:CBLI) has experienced 2 unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results exhibited by the aforementioned strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Cleveland BioLabs, Inc. (NASDAQ:CBLI) is an important part of this process.

Click here to learn why you should track hedge funds