Hedge Funds Are Selling Synutra International, Inc. (SYUT)

We, at Insider Monkey, have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Synutra International, Inc. (NASDAQ:SYUT).

Synutra International, Inc. (NASDAQ:SYUT) was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. Synutra International, Inc. (NASDAQ:SYUT) investors should pay attention to a decrease in hedge fund interest of late. There were 6 hedge funds in our database with Synutra International, Inc. (NASDAQ:SYUT) holdings at the end of the previous quarter. At the end of this article, we will also compare Synutra International, Inc. (NASDAQ:SYUT) to other stocks, including Lion Biotechnologies Inc (NASDAQ:LBIO), Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH), and York Water Company (NASDAQ:YORW) to get a better sense of its popularity.

According to most investors, hedge funds are perceived as unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds in operation today, Our researchers choose to focus on the leaders of this group, about 700 funds. These hedge fund managers shepherd the lion’s share of the smart money’s total asset base, and by paying attention to their highest performing equity investments, Insider Monkey has found a few investment strategies that have historically outstripped Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, let’s analyze the new action encompassing Synutra International, Inc. (NASDAQ:SYUT).

How have hedgies been trading Synutra International, Inc. (NASDAQ:SYUT)?

Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 17% from the second quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies holds the largest position in Synutra International, Inc. (NASDAQ:SYUT). Renaissance Technologies has a $0.8 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Renaissance Technologies’s heels is Warren Lammert of Granite Point Capital, with a $0.2 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Peter Muller’s PDT Partners, Roger Ibbotson’s Zebra Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.

Due to the fact that Synutra International, Inc. (NASDAQ:SYUT) has faced a bearish sentiment from the aggregate hedge fund industry, we can see that there exists a select few hedgies who were dropping their full holdings in the third quarter. At the top of the heap, Rob Romero’s Connective Capital Management cut the biggest position of the 700 funds followed by Insider Monkey, valued at an estimated $0.7 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $0.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 fund in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Synutra International, Inc. (NASDAQ:SYUT) but similarly valued. These stocks are Lion Biotechnologies Inc (NASDAQ:LBIO), Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH), York Water Company (NASDAQ:YORW), and Akarti Therapeutics PLC (ADR) (NASDAQ:AKTX). This group of stocks’ market valuations is closest to Synutra International, Inc. (NASDAQ:SYUT)’s market valuation.

As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $1 million in Synutra International, Inc. (NASDAQ:SYUT)’s case. Lion Biotechnologies Inc (NASDAQ:LBIO) is the most popular stock in this table. On the other hand. York Water Company (NASDAQ:YORW) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks, Synutra International, Inc. (NASDAQ:SYUT) is even less popular than York Water Company (NASDAQ:YORW). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.