Is Balchem Corporation (NASDAQ:BCPC) a bargain? Investors who are in the know are buying. The number of long hedge fund bets advanced by 1 recently.
To most shareholders, hedge funds are viewed as slow, old investment tools of years past. While there are more than 8000 funds in operation today, we at Insider Monkey choose to focus on the top tier of this club, close to 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total asset base, and by watching their best picks, we have identified a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as integral, optimistic insider trading sentiment is a second way to parse down the investments you’re interested in. Obviously, there are lots of stimuli for an executive to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
With all of this in mind, we’re going to take a look at the latest action regarding Balchem Corporation (NASDAQ:BCPC).
What does the smart money think about Balchem Corporation (NASDAQ:BCPC)?
At the end of the first quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of 13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes substantially.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Balchem Corporation (NASDAQ:BCPC). Royce & Associates has a $64 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $9.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Richard S. Meisenberg’s ACK Asset Management, Douglas T. Granat’s Trigran Investments and Joel Greenblatt’s Gotham Asset Management.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. ACK Asset Management, managed by Richard S. Meisenberg, assembled the biggest position in Balchem Corporation (NASDAQ:BCPC). ACK Asset Management had 9.5 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.7 million position during the quarter. The other funds with brand new BCPC positions are John Overdeck and David Siegel’s Two Sigma Advisors and Steven Cohen’s SAC Capital Advisors.
What have insiders been doing with Balchem Corporation (NASDAQ:BCPC)?
Insider buying is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Balchem Corporation (NASDAQ:BCPC) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Balchem Corporation (NASDAQ:BCPC). These stocks are FutureFuel Corp. (NYSE:FF), Rentech, Inc. (NYSEAMEX:RTK), LSB Industries, Inc. (NYSE:LXU), PetroLogistics LP (NYSE:PDH), and A. Schulman Inc (NASDAQ:SHLM). This group of stocks are in the chemicals – major diversified industry and their market caps match BCPC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| FutureFuel Corp. (NYSE:FF) | 10 | 2 | 0 |
| Rentech, Inc. (NYSEAMEX:RTK) | 15 | 0 | 4 |
| LSB Industries, Inc. (NYSE:LXU) | 13 | 0 | 8 |
| PetroLogistics LP (NYSE:PDH) | 10 | 0 | 0 |
| A. Schulman Inc (NASDAQ:SHLM) | 12 | 1 | 1 |
With the results demonstrated by our tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and Balchem Corporation (NASDAQ:BCPC) shareholders fit into this picture quite nicely.
