China XD Plastics Co Ltd (NASDAQ:CXDC) investors should pay attention to a decrease in hedge fund sentiment in recent months.
In the eyes of most shareholders, hedge funds are viewed as underperforming, old financial tools of the past. While there are greater than 8000 funds in operation at the moment, we look at the leaders of this club, around 450 funds. Most estimates calculate that this group controls most of the smart money’s total asset base, and by keeping an eye on their top picks, we have deciphered a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped 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 24 percentage points in 7 months (see the details here).
Equally as integral, positive insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are plenty of stimuli for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).
With these “truths” under our belt, we’re going to take a glance at the recent action regarding China XD Plastics Co Ltd (NASDAQ:CXDC).
How are hedge funds trading China XD Plastics Co Ltd (NASDAQ:CXDC)?
At year’s end, a total of 6 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably.
How have insiders been trading China XD Plastics Co Ltd (NASDAQ:CXDC)?
Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the latest six-month time period, China XD Plastics Co Ltd (NASDAQ:CXDC) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to China XD Plastics Co Ltd (NASDAQ:CXDC). These stocks are Core Molding Technologies, Inc. (NYSEAMEX:CMT), Myers Industries, Inc. (NYSE:MYE), STR Holdings, Inc. (NYSE:STRI), AEP Industries (NASDAQ:AEPI), and Spartech Corporation (NYSE:SEH). This group of stocks belong to the rubber & plastics industry and their market caps resemble CXDC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Core Molding Technologies, Inc. (NYSEAMEX:CMT) | 2 | 1 | 0 |
| Myers Industries, Inc. (NYSE:MYE) | 6 | 1 | 1 |
| STR Holdings, Inc. (NYSE:STRI) | 8 | 0 | 0 |
| AEP Industries (NASDAQ:AEPI) | 8 | 0 | 6 |
| Spartech Corporation (NYSE:SEH) | 9 | 0 | 5 |
With the returns exhibited by the aforementioned research, everyday investors should always watch hedge fund and insider trading sentiment, and China XD Plastics Co Ltd (NASDAQ:CXDC) is no exception.
