Should You Avoid TETRA Technologies, Inc. (TTI)?

Is TETRA Technologies, Inc. (NYSE:TTI) a good investment?

In the eyes of many of your peers, hedge funds are viewed as overrated, outdated financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds trading currently, Insider Monkey looks at the elite of this club, about 525 funds. It is assumed that this group oversees most of the smart money’s total assets, and by keeping an eye on their highest quality stock picks, we’ve come up with a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a 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 outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as crucial, bullish insider trading sentiment is another way to analyze the financial markets. Obviously, there are many stimuli for an insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this method if piggybackers understand what to do (learn more here).

Keeping this in mind, let’s analyze the latest info for TETRA Technologies, Inc. (NYSE:TTI).

Hedge fund activity in TETRA Technologies, Inc. (NYSE:TTI)

Heading into Q3, a total of 12 of the hedge funds we track held long positions in this stock, a change of -8% from the first quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings significantly.

When using filings from the hedgies we track, Roumell Asset Management, managed by Jim Roumell, holds the biggest position in TETRA Technologies, Inc. (NYSE:TTI). Roumell Asset Management has a $12.5 million position in the stock, comprising 8.6% of its 13F portfolio. On Roumell Asset Management’s heels is Israel Englander of Millennium Management, with a $7.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Eric Edidin and Josh Lobel’s Archer Capital Management, Zeke Ashton’s Centaur Capital Partners and Jay Petschek and Steven Major’s Corsair Capital Management.

Judging by the fact that TETRA Technologies, Inc. (NYSE:TTI) has witnessed a fall in interest from the top-tier hedge fund industry, we can see that there was a specific group of fund managers who sold off their positions entirely at the end of the second quarter. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the biggest investment of the 450+ funds we monitor, worth an estimated $1.1 million in stock, and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund dropped about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 1 funds at the end of the second quarter.

How have insiders been trading TETRA Technologies, Inc. (NYSE:TTI)?

Insider buying made by high-level executives is particularly usable when the company in focus has seen transactions within the past six months. Over the last half-year time period, TETRA Technologies, Inc. (NYSE:TTI) has seen zero unique insiders purchasing, 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 TETRA Technologies, Inc. (NYSE:TTI). These stocks are C&J Energy Services Inc (NYSE:CJES), Tesco Corporation (USA) (NASDAQ:TESO), Basic Energy Services, Inc (NYSE:BAS), GulfMark Offshore, Inc. (NYSE:GLF), and Newpark Resources Inc (NYSE:NR). All of these stocks are in the oil & gas equipment & services industry and their market caps match TTI’s market cap.