Is Mitcham Industries, Inc. (MIND) Going to Burn These Hedge Funds?

Mitcham Industries, Inc. (NASDAQ:MIND) has experienced a decrease in enthusiasm from smart money in recent months.

In the eyes of most shareholders, hedge funds are perceived as unimportant, outdated investment tools of years past. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the leaders of this club, about 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total asset base, and by tracking their best equity investments, we have discovered a number of investment strategies that have historically outstripped the market. 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 began to 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 (check out a sample of our picks).

Equally as beneficial, optimistic insider trading activity is another way to break down the financial markets. Just as you’d expect, there are many stimuli for an executive to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).

With these “truths” under our belt, we’re going to take a look at the recent action surrounding Mitcham Industries, Inc. (NASDAQ:MIND).

Hedge fund activity in Mitcham Industries, Inc. (NASDAQ:MIND)

At Q1’s end, a total of 9 of the hedge funds we track were long in this stock, a change of -10% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, John W. Rogers’s Ariel Investments had the most valuable position in Mitcham Industries, Inc. (NASDAQ:MIND), worth close to $42 million, comprising 0.7% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $2.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Michael Doheny’s Freshford Capital Management, Whitney Tilson’s T2 Partners and Chuck Royce’s Royce & Associates.

Due to the fact that Mitcham Industries, Inc. (NASDAQ:MIND) has experienced a declination in interest from the smart money, we can see that there were a few funds who sold off their positions entirely in Q1. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management said goodbye to the biggest position of all the hedgies we watch, comprising close to $0.2 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds in Q1.

What do corporate executives and insiders think about Mitcham Industries, Inc. (NASDAQ:MIND)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time period, Mitcham Industries, Inc. (NASDAQ:MIND) has seen 1 unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Mitcham Industries, Inc. (NASDAQ:MIND). These stocks are GSI Group Inc. (USA) (NASDAQ:GSIG), Zygo Corporation (NASDAQ:ZIGO), Hurco Companies, Inc. (NASDAQ:HURC), Telenav Inc (NASDAQ:TNAV), and Vishay Precision Group Inc (NYSE:VPG). All of these stocks are in the scientific & technical instruments industry and their market caps are similar to MIND’s market cap.

With the results demonstrated by Insider Monkey’s research, retail investors should always pay attention to hedge fund and insider trading sentiment, and Mitcham Industries, Inc. (NASDAQ:MIND) applies perfectly to this mantra.

Click here to learn why you should track hedge funds