Geospace Technologies Corp (GEOS): Insiders Aren’t Crazy About It

Geospace Technologies Corp (NASDAQ:GEOS) has experienced an increase in hedge fund sentiment recently.

If you’d ask most stock holders, hedge funds are perceived as worthless, old financial vehicles of the past. While there are over 8000 funds in operation today, we choose to focus on the aristocrats of this club, about 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total asset base, and by paying attention to their highest performing stock picks, we have revealed a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 23.3 percentage points in 8 months (see the details here).

Equally as integral, positive insider trading activity is a second way to parse down the stock market universe. Obviously, there are a number of incentives for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).

With all of this in mind, we’re going to take a look at the key action encompassing Geospace Technologies Corp (NASDAQ:GEOS).

What have hedge funds been doing with Geospace Technologies Corp (NASDAQ:GEOS)?

In preparation for this quarter, a total of 14 of the hedge funds we track were bullish in this stock, a change of 8% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Millennium Management, managed by Israel Englander, holds the biggest position in Geospace Technologies Corp (NASDAQ:GEOS). Millennium Management has a $37.1 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Drew Cupps of Cupps Capital Management, with a $17.6 million position; 1.8% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Ken Heebner’s Capital Growth Management, Richard Driehaus’s Driehaus Capital and Andrew Sandler’s Sandler Capital Management.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Capital Growth Management, managed by Ken Heebner, created the most outsized position in Geospace Technologies Corp (NASDAQ:GEOS). Capital Growth Management had 17.3 million invested in the company at the end of the quarter. Phil Frohlich’s Prescott Group Capital Management also made a $2.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is David Costen Haley’s HBK Investments.

Insider trading activity in Geospace Technologies Corp (NASDAQ:GEOS)

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, Geospace Technologies Corp (NASDAQ:GEOS) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Geospace Technologies Corp (NASDAQ:GEOS). These stocks are ESCO Technologies Inc. (NYSE:ESE), Cubic Corporation (NYSE:CUB), Curtiss-Wright Corp. (NYSE:CW), Ixia (NASDAQ:XXIA), and Coherent, Inc. (NASDAQ:COHR). All of these stocks are in the scientific & technical instruments industry and their market caps match GEOS’s market cap.

With the results shown by our strategies, retail investors should always watch hedge fund and insider trading sentiment, and Geospace Technologies Corp (NASDAQ:GEOS) shareholders fit into this picture quite nicely.

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