Should You Buy Flotek Industries Inc (FTK)?

What’s a smart Flotek Industries Inc (NYSE:FTK) investor to do?

To the average investor, there are many gauges market participants can use to monitor publicly traded companies. A pair of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outperform their index-focused peers by a solid amount (see just how much).

Just as necessary, positive insider trading activity is a second way to look at the stock market universe. Obviously, there are plenty of reasons for an executive to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).

Now that that’s out of the way, it’s important to examine the newest info about Flotek Industries Inc (NYSE:FTK).

Hedge fund activity in Flotek Industries Inc (NYSE:FTK)

Heading into Q3, a total of 15 of the hedge funds we track were long in this stock, a change of 25% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.

Out of the hedge funds we follow, Gates Capital Management, managed by Jeffrey Gates, holds the largest position in Flotek Industries Inc (NYSE:FTK). Gates Capital Management has a $82.6 million position in the stock, comprising 3.8% of its 13F portfolio. On Gates Capital Management’s heels is Drew Cupps of Cupps Capital Management, with a $20.9 million position; 1.7% of its 13F portfolio is allocated to the company. Some other peers that are bullish include William Harnisch’s Peconic Partners LLC, Richard Driehaus’s Driehaus Capital and Andrew Sandler’s Sandler Capital Management.

As industrywide interest increased, certain bigger names have jumped into Flotek Industries Inc (NYSE:FTK) headfirst. Gates Capital Management, managed by Jeffrey Gates, created the biggest position in Flotek Industries Inc (NYSE:FTK). Gates Capital Management had 82.6 million invested in the company at the end of the quarter. Drew Cupps’s Cupps Capital Management also made a $20.9 million investment in the stock during the quarter. The other funds with brand new FTK positions are William Harnisch’s Peconic Partners LLC, Richard Driehaus’s Driehaus Capital, and Andrew Sandler’s Sandler Capital Management.

How have insiders been trading Flotek Industries Inc (NYSE:FTK)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last 180-day time period, Flotek Industries Inc (NYSE:FTK) has seen 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 Flotek Industries Inc (NYSE:FTK). These stocks are Koppers Holdings Inc. (NYSE:KOP), WD-40 Company (NASDAQ:WDFC), Kraton Performance Polymers Inc (NYSE:KRA), OM Group, Inc. (NYSE:OMG), and Quaker Chemical Corp (NYSE:KWR). This group of stocks are the members of the specialty chemicals industry and their market caps resemble FTK’s market cap.