Gentherm Inc (THRM): Hedge Funds and Insiders Are Bearish, What Should You Do?

Gentherm Inc (NASDAQ:THRM) was in 10 hedge funds’ portfolio at the end of December. THRM has seen a decrease in support from the world’s most elite money managers lately. There were 11 hedge funds in our database with THRM holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are a multitude of gauges shareholders can use to analyze Mr. Market. A duo of the best 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 money managers can outperform the S&P 500 by a superb margin (see just how much).

Equally as key, positive insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are lots of motivations for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).

Keeping this in mind, let’s take a look at the latest action regarding Gentherm Inc (NASDAQ:THRM).

How have hedgies been trading Gentherm Inc (NASDAQ:THRM)?

Heading into 2013, a total of 10 of the hedge funds we track held long positions in this stock, a change of -9% from the third quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, Invicta Capital Management, managed by Gregory A. Weaver, holds the biggest position in Gentherm Inc (NASDAQ:THRM). Invicta Capital Management has a $9.2 million position in the stock, comprising 4.1% of its 13F portfolio. On Invicta Capital Management’s heels is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $8.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include John Fichthorn’s Dialectic Capital Management, Andy Redleaf’s Whitebox Advisors and Phil Frohlich’s Prescott Group Capital Management.

Since Gentherm Inc (NASDAQ:THRM) has faced a declination in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of funds who sold off their full holdings at the end of the year. Interestingly, Paul Tudor Jones’s Tudor Investment Corp sold off the largest stake of all the hedgies we watch, totaling close to $0.2 million in stock. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds at the end of the year.

What do corporate executives and insiders think about Gentherm Inc (NASDAQ:THRM)?

Bullish insider trading is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time frame, Gentherm Inc (NASDAQ:THRM) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Gentherm Inc (NASDAQ:THRM). These stocks are Meritor Inc (NYSE:MTOR), Standard Motor Products, Inc. (NYSE:SMP), Federal-Mogul Corporation (NASDAQ:FDML), Superior Industries International Inc. (NYSE:SUP), and Remy International Inc (NASDAQ:REMY). This group of stocks are the members of the auto parts industry and their market caps are similar to THRM’s market cap.

With the returns demonstrated by Insider Monkey’s research, everyday investors must always pay attention to hedge fund and insider trading activity, and Gentherm Inc (NASDAQ:THRM) is no exception.

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