Is Sensient Technologies Corporation (SXT) Going to Burn These Hedge Funds?

Seeing as Sensient Technologies Corporation (NYSE:SXT) has experienced falling interest from the smart money, it’s safe to say that there was a specific group of fund managers who were dropping their entire stakes heading into Q4. Interestingly, Paul Tudor Jones’ Tudor Investment Corp dropped the biggest investment of all the hedgies tracked by Insider Monkey, worth an estimated $0.3 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also cut its stock, about $0.2 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Sensient Technologies Corporation (NYSE:SXT). We will take a look at Ciena Corporation (NASDAQ:CIEN), Dyax Corp. (NASDAQ:DYAX), G-III Apparel Group, Ltd. (NASDAQ:GIII), and Mercury General Corporation (NYSE:MCY). This group of stocks’ market caps are similar to SXT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CIEN 33 258849 2
DYAX 32 512610 -1
GIII 18 177738 -1
MCY 8 17969 0

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $242 million, compared to $130 million in SXT’s case. Ciena Corporation (NASDAQ:CIEN) is the most popular stock in this table, while Mercury General Corporation (NYSE:MCY) is the least popular one with only 8 bullish hedge fund positions. Sensient Technologies Corporation (NYSE:SXT) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CIEN might be a better candidate to consider a long position.