Should You Avoid Analogic Corporation (ALOG)?

Is it smart to be bullish on Analogic Corporation (NASDAQ:ALOG)?

In the financial world, there are many indicators shareholders can use to monitor stocks. A pair of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce their index-focused peers by a superb amount (see just how much).

Just as crucial, positive insider trading sentiment is a second way to analyze the marketplace. Just as you’d expect, there are many reasons for an executive to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if investors understand what to do (learn more here).

Keeping this in mind, we’re going to discuss the newest info about Analogic Corporation (NASDAQ:ALOG).

Hedge fund activity in Analogic Corporation (NASDAQ:ALOG)

At the end of the second quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of -43% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully.

When using filings from the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Analogic Corporation (NASDAQ:ALOG), worth close to $41.6 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $7.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Judging by the fact that Analogic Corporation (NASDAQ:ALOG) has experienced a fall in interest from the top-tier hedge fund industry, logic holds that there lies a certain “tier” of money managers that elected to cut their positions entirely heading into Q2. Interestingly, Andy Redleaf’s Whitebox Advisors cut the largest position of all the hedgies we key on, valued at an estimated $0.7 million in call options.. Matthew Hulsizer’s fund, PEAK6 Capital Management, also sold off its call options., about $0.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 6 funds heading into Q2.

What have insiders been doing with Analogic Corporation (NASDAQ:ALOG)?

Insider buying is most useful when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time frame, Analogic Corporation (NASDAQ:ALOG) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Analogic Corporation (NASDAQ:ALOG). These stocks are Cubic Corporation (NYSE:CUB), ESCO Technologies Inc. (NYSE:ESE), Ion Geophysical Corp (NYSE:IO), II-VI, Inc. (NASDAQ:IIVI), and MTS Systems Corporation (NASDAQ:MTSC). This group of stocks belong to the scientific & technical instruments industry and their market caps are closest to ALOG’s market cap.

Using the returns explained by the previously mentioned strategies, average investors should always keep one eye on hedge fund and insider trading sentiment, and Analogic Corporation (NASDAQ:ALOG) shareholders fit into this picture quite nicely.

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