Should You Buy Green Plains Renewable Energy Inc. (GPRE)?

To the average investor, there are dozens of metrics market participants can use to track the equity markets. Some of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite investment managers can beat the broader indices by a superb margin (see just how much).

Equally as necessary, positive insider trading activity is a second way to analyze the world of equities. As the old adage goes: there are lots of incentives for an executive to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this method if you understand where to look (learn more here).

Now that that’s out of the way, we’re going to study the latest info about Green Plains Renewable Energy Inc. (NASDAQ:GPRE).

How have hedgies been trading Green Plains Renewable Energy Inc. (NASDAQ:GPRE)?

At the end of the second quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 60% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully.

Out of the hedge funds we follow, Eric Bannasch’s Cadian Capital had the biggest position in Green Plains Renewable Energy Inc. (NASDAQ:GPRE), worth close to $28 million, comprising 0.9% of its total 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $4.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.

As aggregate interest spiked, particular hedge funds have jumped into Green Plains Renewable Energy Inc. (NASDAQ:GPRE) headfirst. Cadian Capital, managed by Eric Bannasch, established the most outsized position in Green Plains Renewable Energy Inc. (NASDAQ:GPRE). Cadian Capital had 28 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $6.7 million investment in the stock during the quarter. The following funds were also among the new GPRE investors: Glenn Russell Dubin’s Highbridge Capital Management, Cliff Asness’s AQR Capital Management, and Ken Griffin’s Citadel Investment Group.

How have insiders been trading Green Plains Renewable Energy Inc. (NASDAQ:GPRE)?

Insider buying is particularly usable when the company in question has seen transactions within the past six months. Over the latest half-year time frame, Green Plains Renewable Energy Inc. (NASDAQ:GPRE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Green Plains Renewable Energy Inc. (NASDAQ:GPRE). These stocks are REX American Resources Corp (NYSE:REX), Oil-Dri Corporation of America (NYSE:ODC), Ferro Corporation (NYSE:FOE), KMG Chemicals, Inc. (NYSE:KMG), and OMNOVA Solutions Inc. (NYSE:OMN). This group of stocks are in the specialty chemicals industry and their market caps are closest to GPRE’s market cap.