Should You Avoid Celadon Group, Inc. (CGI)?

Is Celadon Group, Inc. (NYSE:CGI) the right pick for your portfolio? Investors who are in the know are selling. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience

At the moment, there are plenty of metrics market participants can use to monitor their holdings. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the broader indices by a superb amount (see just how much).

Just as key, bullish insider trading sentiment is a second way to break down the stock market universe. There are many stimuli for an executive to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this method if you understand where to look (learn more here).

Keeping this in mind, let’s take a peek at the latest action surrounding Celadon Group, Inc. (NYSE:CGI).

How have hedgies been trading Celadon Group, Inc. (NYSE:CGI)?

In preparation for this quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.

Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in Celadon Group, Inc. (NYSE:CGI), worth close to $18.1 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Driehaus Capital, managed by Richard Driehaus, which held a $3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Since Celadon Group, Inc. (NYSE:CGI) has witnessed declining sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that elected to cut their entire stakes heading into Q2. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management dropped the largest stake of the 450+ funds we monitor, valued at about $5.4 million in stock.. Israel Englander’s fund, Catapult Capital Management, also said goodbye to its stock, about $0.7 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Celadon Group, Inc. (NYSE:CGI)?

Insider buying is best served when the company in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Celadon Group, Inc. (NYSE:CGI) has experienced 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Celadon Group, Inc. (NYSE:CGI). These stocks are Arkansas Best Corporation (NASDAQ:ABFS), Universal Truckload Services, Inc. (NASDAQ:UACL), Saia Inc (NASDAQ:SAIA), Echo Global Logistics, Inc. (NASDAQ:ECHO), and Marten Transport, Ltd (NASDAQ:MRTN). This group of stocks belong to the trucking industry and their market caps match CGI’s market cap.

With the returns shown by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Celadon Group, Inc. (NYSE:CGI) applies perfectly to this mantra.

Click here to learn why you should track hedge funds