Balchem Corporation (BCPC): Insiders Aren’t Crazy About It But Hedge Funds Love It

Now, according to many market players, hedge funds are seen as bloated, outdated financial vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds trading today, Insider Monkey focuses on the top tier of this group, around 525 funds. It is widely held that this group controls most of the smart money’s total capital, and by watching their best equity investments, we’ve unearthed a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as necessary, positive insider trading activity is a second way to analyze the financial markets. There are a variety of reasons for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).

What’s more, let’s examine the newest info for Balchem Corporation (NASDAQ:BCPC).

How have hedgies been trading Balchem Corporation (NASDAQ:BCPC)?

At Q2’s end, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the first quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes significantly.

When using filings from the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Balchem Corporation (NASDAQ:BCPC), worth close to $65.8 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $10.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Douglas T. Granat’s Trigran Investments, Richard S. Meisenberg’s ACK Asset Management and Matthew Hulsizer’s PEAK6 Capital Management.

As industrywide interest increased, certain bigger names were breaking ground themselves. Royce & Associates, managed by Chuck Royce, established the most outsized position in Balchem Corporation (NASDAQ:BCPC). Royce & Associates had 65.8 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $10.4 million investment in the stock during the quarter. The following funds were also among the new BCPC investors: Douglas T. Granat’s Trigran Investments, Richard S. Meisenberg’s ACK Asset Management, and Matthew Hulsizer’s PEAK6 Capital Management.

How are insiders trading Balchem Corporation (NASDAQ:BCPC)?

Bullish insider trading is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest 180-day time period, Balchem Corporation (NASDAQ:BCPC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators 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 the members of the chemicals – major diversified industry and their market caps match BCPC’s market cap.

Using the results shown by Insider Monkey’s tactics, average investors should always pay attention to hedge fund and insider trading sentiment, and Balchem Corporation (NASDAQ:BCPC) shareholders fit into this picture quite nicely.

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