Hedge Funds Are Dumping Solazyme Inc (SZYM)

At the moment, there are plenty of gauges Solazyme Inc (NASDAQ:SZYM) investors can use to analyze publicly traded companies. A duo of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the market by a healthy margin (see just how much).

Just as crucial, bullish insider trading sentiment is another way to look at the financial markets. There are a variety of incentives for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).

Thus, we’re going to examine the recent info surrounding Solazyme Inc (NASDAQ:SZYM).

How have hedgies been trading Solazyme Inc (NASDAQ:SZYM)?

Heading into Q3, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.

According to our 13F database, Passport Capital, managed by John Burbank, holds the biggest position in Solazyme Inc (NASDAQ:SZYM). Passport Capital has a $7.2 million position in the stock, comprising 0.2% of its 13F portfolio. On Passport Capital’s heels is William Harnisch of Peconic Partners LLC, with a $3.7 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Michael Platt and William Reeves’s BlueCrest Capital Mgmt., John Murphy’s Alydar Capital and Matthew Hulsizer’s PEAK6 Capital Management.

As Solazyme Inc (NASDAQ:SZYM) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of funds that elected to cut their positions entirely in Q1. Interestingly, Steven Cohen’s SAC Capital Advisors cut the largest position of all the hedgies we track, valued at an estimated $3.9 million in stock, and Andrew R. Midler of Savitr Capital was right behind this move, as the fund dropped about $1.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds in Q1.

How have insiders been trading Solazyme Inc (NASDAQ:SZYM)?

Bullish insider trading is best served when the company in question has seen transactions within the past 180 days. Over the last 180-day time period, Solazyme Inc (NASDAQ:SZYM) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Solazyme Inc (NASDAQ:SZYM). These stocks are LSB Industries, Inc. (NYSE:LXU), Aceto Corporation (NASDAQ:ACET), Landec Corporation (NASDAQ:LNDC), Rentech, Inc. (NYSEAMEX:RTK), and FutureFuel Corp. (NYSE:FF). This group of stocks belong to the chemicals – major diversified industry and their market caps match SZYM’s market cap.

Using the results shown by our research, regular investors must always keep one eye on hedge fund and insider trading activity, and Solazyme Inc (NASDAQ:SZYM) is no exception.

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