Primoris Services Corp (PRIM): Hedge Funds Are Bearish and Insiders Are Undecided, What Should You Do?

Should Primoris Services Corp (NASDAQ:PRIM) investors track the following data?

To many market players, hedge funds are assumed to be overrated, old investment vehicles of a period lost to current times. Although there are more than 8,000 hedge funds trading in present day, this site aim at the masters of this club, about 525 funds. Analysts calculate that this group has its hands on most of the hedge fund industry’s total capital, and by watching their highest performing picks, we’ve unsheathed a number of investment strategies that have historically outstripped the S&P 500. Our small-cap hedge fund strategy outperformed 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 beaten the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as necessary, optimistic insider trading activity is another way to analyze the investments you’re interested in. Obviously, there are lots of incentives for an executive to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).

What’s more, we’re going to study the newest info surrounding Primoris Services Corp (NASDAQ:PRIM).

Hedge fund activity in Primoris Services Corp (NASDAQ:PRIM)

At the end of the second quarter, a total of 12 of the hedge funds we track were long in this stock, a change of -33% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.

Out of the hedge funds we follow, Driehaus Capital, managed by Richard Driehaus, holds the largest position in Primoris Services Corp (NASDAQ:PRIM). Driehaus Capital has a $3.7 million position in the stock, comprising 0.2% of its 13F portfolio. On Driehaus Capital’s heels is AQR Capital Management, managed by Cliff Asness, which held a $2.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish include Jim Simons’s Renaissance Technologies, Carl Tiedemann and Michael Tiedemann’s TIG Advisors and John Overdeck and David Siegel’s Two Sigma Advisors.

Because Primoris Services Corp (NASDAQ:PRIM) has witnessed declining interest from upper-tier hedge fund managers, it’s easy to see that there was a specific group of hedgies that slashed their entire stakes at the end of the second quarter. It’s worth mentioning that Richard S. Meisenberg’s ACK Asset Management dumped the largest investment of the 450+ funds we track, worth about $9.9 million in stock, and Andrew R. Midler of Savitr Capital was right behind this move, as the fund dumped about $3.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 6 funds at the end of the second quarter.

How have insiders been trading Primoris Services Corp (NASDAQ:PRIM)?

Insider buying made by high-level executives is particularly usable when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Primoris Services Corp (NASDAQ:PRIM) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Primoris Services Corp (NASDAQ:PRIM). These stocks are Empresas ICA SA (ADR) (NYSE:ICA), Dycom Industries, Inc. (NYSE:DY), Aegion Corp – Class A (NASDAQ:AEGN), Tutor Perini Corp (NYSE:TPC), and Granite Construction Inc. (NYSE:GVA). All of these stocks are in the heavy construction industry and their market caps are similar to PRIM’s market cap.

Using the results demonstrated by our strategies, regular investors should always track hedge fund and insider trading sentiment, and Primoris Services Corp (NASDAQ:PRIM) is no exception.

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