This Metric Says You Are Smart to Sell Casella Waste Systems Inc. (CWST)

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Casella Waste Systems Inc. (NASDAQ:CWST) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. CWST investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 13 hedge funds in our database with CWST holdings at the end of the previous quarter.

In the financial world, there are plenty of indicators market participants can use to analyze Mr. Market. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass their index-focused peers by a solid margin (see just how much).

Just as beneficial, positive insider trading activity is another way to parse down the world of equities. Obviously, there are plenty of motivations for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this method if piggybackers understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a look at the latest action regarding Casella Waste Systems Inc. (NASDAQ:CWST).

What does the smart money think about Casella Waste Systems Inc. (NASDAQ:CWST)?

Heading into 2013, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.

When looking at the hedgies we track, Roberto Mignone’s Bridger Management had the biggest position in Casella Waste Systems Inc. (NASDAQ:CWST), worth close to $7.9 million, comprising 0.6% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $4.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions include John Zaro’s Bourgeon Capital, Brian Taylor’s Pine River Capital Management and Ian P. Murray’s Lanexa Global Management.

TUDOR INVESTMENT CORPJudging by the fact that Casella Waste Systems Inc. (NASDAQ:CWST) has faced a declination in interest from the smart money, logic holds that there is a sect of fund managers that decided to sell off their positions entirely at the end of the year. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp dumped the largest investment of the 450+ funds we watch, totaling about $0.9 million in stock.. Mark Broach’s fund, Manatuck Hill Partners, also dumped its stock, about $0.9 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Casella Waste Systems Inc. (NASDAQ:CWST)

Bullish insider trading is best served when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time frame, Casella Waste Systems Inc. (NASDAQ:CWST) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Casella Waste Systems Inc. (NASDAQ:CWST). These stocks are Ecology and Environment (NASDAQ:EEI), US Ecology Inc. (NASDAQ:ECOL), EnergySolutions, Inc. (NYSE:ES), and TRC Companies, Inc. (NYSE:TRR). All of these stocks are in the waste management industry and their market caps are closest to CWST’s market cap.

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