In the eyes of many market players, hedge funds are seen as bloated, outdated financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds trading currently, Insider Monkey focuses on the aristocrats of this club, about 525 funds. It is assumed that this group has its hands on the lion’s share of all hedge funds’ total capital, and by keeping an eye on their highest performing equity investments, we’ve uncovered a few investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as crucial, bullish insider trading sentiment is a second way to analyze the stock market universe. As the old adage goes: there are many reasons for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).
Furthermore, it’s important to discuss the latest info surrounding STR Holdings, Inc. (NYSE:STRI).
How have hedgies been trading STR Holdings, Inc. (NYSE:STRI)?
At the end of the second quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of 33% from the first quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably.
According to our 13F database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in STR Holdings, Inc. (NYSE:STRI). Renaissance Technologies has a $1.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners and D. E. Shaw’s D E Shaw.
Now, certain money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, initiated the most outsized position in STR Holdings, Inc. (NYSE:STRI). Renaissance Technologies had 1.8 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new STRI investors: Cliff Asness’s AQR Capital Management, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and D. E. Shaw’s D E Shaw.
What do corporate executives and insiders think about STR Holdings, Inc. (NYSE:STRI)?
Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, STR Holdings, Inc. (NYSE:STRI) has experienced zero unique insiders purchasing, 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 STR Holdings, Inc. (NYSE:STRI). These stocks are AEP Industries (NASDAQ:AEPI), Spartech Corporation (NYSE:SEH), Deswell Industries, Inc. (NASDAQ:DSWL), China XD Plastics Co Ltd (NASDAQ:CXDC), and Core Molding Technologies, Inc. (NYSEAMEX:CMT). This group of stocks are the members of the rubber & plastics industry and their market caps are similar to STRI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| AEP Industries (NASDAQ:AEPI) | 8 | 0 | 0 |
| Spartech Corporation (NYSE:SEH) | 0 | 0 | |
| Deswell Industries, Inc. (NASDAQ:DSWL) | 0 | 0 | |
| China XD Plastics Co Ltd (NASDAQ:CXDC) | 5 | 0 | 0 |
| Core Molding Technologies, Inc. (NYSEAMEX:CMT) | 4 | 0 | 0 |
Using the returns shown by our research, average investors must always pay attention to hedge fund and insider trading activity, and STR Holdings, Inc. (NYSE:STRI) shareholders fit into this picture quite nicely.
