Is West Marine, Inc. (NASDAQ:WMAR) a good investment?
To the average investor, there are tons of gauges investors can use to analyze stocks. A couple of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outperform the S&P 500 by a superb margin (see just how much).
Just as necessary, bullish insider trading activity is a second way to look at the marketplace. There are many incentives for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
Keeping this in mind, let’s examine the recent info for West Marine, Inc. (NASDAQ:WMAR).
What have hedge funds been doing with West Marine, Inc. (NASDAQ:WMAR)?
Heading into Q3, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in West Marine, Inc. (NASDAQ:WMAR). Royce & Associates has a $18 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Select Equity Group, managed by Robert Joseph Caruso, which held a $14.6 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Matthew Drapkin and Steven R. Becker’s Becker Drapkin Management, Roger Keith Long’s Otter Creek Management and Jim Simons’s Renaissance Technologies.
What have insiders been doing with West Marine, Inc. (NASDAQ:WMAR)?
Legal insider trading, particularly when it’s bullish, is best served when the company we’re looking at has seen transactions within the past six months. Over the latest half-year time period, West Marine, Inc. (NASDAQ:WMAR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to West Marine, Inc. (NASDAQ:WMAR). These stocks are Winmark Corporation (NASDAQ:WINA), CSS Industries, Inc. (NYSE:CSS), Odyssey Marine Exploration Inc (NASDAQ:OMEX), TravelCenters of America LLC (NYSEAMEX:TA), and XO Group Inc (NYSE:XOXO). This group of stocks belong to the specialty retail, other industry and their market caps match WMAR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Winmark Corporation (NASDAQ:WINA) | 4 | 0 | 0 |
| CSS Industries, Inc. (NYSE:CSS) | 7 | 0 | 0 |
| Odyssey Marine Exploration Inc (NASDAQ:OMEX) | 6 | 0 | 0 |
| TravelCenters of America LLC (NYSEAMEX:TA) | 9 | 0 | 0 |
| XO Group Inc (NYSE:XOXO) | 10 | 0 | 0 |
Using the returns shown by our research, average investors should always track hedge fund and insider trading sentiment, and West Marine, Inc. (NASDAQ:WMAR) is an important part of this process.
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