Is Alphatec Holdings Inc (NASDAQ:ATEC) a superb stock to buy now? The best stock pickers are taking a pessimistic view. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience.
If you’d ask most stock holders, hedge funds are seen as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open today, we look at the elite of this group, about 450 funds. Most estimates calculate that this group oversees the majority of the smart money’s total capital, and by monitoring their best investments, we have deciphered a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as key, bullish insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are a number of motivations for an upper level exec to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).
Consequently, it’s important to take a gander at the key action surrounding Alphatec Holdings Inc (NASDAQ:ATEC).
How have hedgies been trading Alphatec Holdings Inc (NASDAQ:ATEC)?
In preparation for this year, a total of 6 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.
Seeing as Alphatec Holdings Inc (NASDAQ:ATEC) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds who sold off their positions entirely heading into 2013. At the top of the heap, Sander Gerber’s Hudson Bay Capital Management said goodbye to the largest investment of all the hedgies we key on, totaling about $0.4 million in stock.. Kevin Kotler’s fund, Broadfin Capital, also dropped its stock, about $0.2 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Alphatec Holdings Inc (NASDAQ:ATEC)
Insider purchases made by high-level executives is at its handiest when the company in question has experienced transactions within the past 180 days. Over the latest 180-day time period, Alphatec Holdings Inc (NASDAQ:ATEC) has seen 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Alphatec Holdings Inc (NASDAQ:ATEC). These stocks are Mesa Laboratories, Inc. (NASDAQ:MLAB), Rochester Medical Corporation (NASDAQ:ROCM), Utah Medical Products, Inc. (NASDAQ:UTMD), Unilife Corp (NASDAQ:UNIS), and STAAR Surgical Company (NASDAQ:STAA). This group of stocks are the members of the medical instruments & supplies industry and their market caps are similar to ATEC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Mesa Laboratories, Inc. (NASDAQ:MLAB) | 2 | 0 | 3 |
| Rochester Medical Corporation (NASDAQ:ROCM) | 3 | 3 | 5 |
| Utah Medical Products, Inc. (NASDAQ:UTMD) | 3 | 0 | 1 |
| Unilife Corp (NASDAQ:UNIS) | 2 | 0 | 0 |
| STAAR Surgical Company (NASDAQ:STAA) | 6 | 2 | 0 |
With the returns exhibited by our tactics, everyday investors should always watch hedge fund and insider trading activity, and Alphatec Holdings Inc (NASDAQ:ATEC) shareholders fit into this picture quite nicely.
