Hedge Funds Are Buying Solta Medical Inc (SLTM)

Is Solta Medical Inc (NASDAQ:SLTM) worth your attention right now? Investors who are in the know are getting more bullish. The number of bullish hedge fund bets moved up by 1 in recent months.

In the eyes of most stock holders, hedge funds are seen as underperforming, old investment tools of years past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey look at the moguls of this group, about 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total asset base, and by paying attention to their best investments, we have discovered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as key, positive insider trading sentiment is another way to break down the investments you’re interested in. As the old adage goes: there are plenty of reasons for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).

Now, we’re going to take a gander at the recent action encompassing Solta Medical Inc (NASDAQ:SLTM).

What does the smart money think about Solta Medical Inc (NASDAQ:SLTM)?

Heading into Q2, a total of 8 of the hedge funds we track held long positions in this stock, a change of 14% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.

According to our comprehensive database, Broadfin Capital, managed by Kevin Kotler, holds the most valuable position in Solta Medical Inc (NASDAQ:SLTM). Broadfin Capital has a $7.6 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Broadwood Capital, managed by Neal C. Bradsher, which held a $1.5 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Samuel Isaly’s OrbiMed Advisors, James E. Flynn’s Deerfield Management and Israel Englander’s Millennium Management.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the biggest position in Solta Medical Inc (NASDAQ:SLTM). Renaissance Technologies had 0.4 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also initiated a $0.3 million position during the quarter. The only other fund with a new position in the stock is D. E. Shaw’s D E Shaw.

Insider trading activity in Solta Medical Inc (NASDAQ:SLTM)

Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past six months. Over the latest half-year time period, Solta Medical Inc (NASDAQ:SLTM) has experienced 2 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Solta Medical Inc (NASDAQ:SLTM). These stocks are RTI Biologics Inc. (NASDAQ:RTIX), Cutera, Inc. (NASDAQ:CUTR), Zeltiq Aesthetics Inc (NASDAQ:ZLTQ), Cryolife Inc (NYSE:CRY), and Hansen Medical, Inc. (NASDAQ:HNSN). This group of stocks are in the medical appliances & equipment industry and their market caps match SLTM’s market cap.

With the results shown by Insider Monkey’s studies, retail investors should always watch hedge fund and insider trading activity, and Solta Medical Inc (NASDAQ:SLTM) applies perfectly to this mantra.

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