This Metric Says You Are Smart to Buy Landec Corporation (LNDC)

Should Landec Corporation (NASDAQ:LNDC) investors track the following data?

In the 21st century investor’s toolkit, there are many metrics market participants can use to analyze publicly traded companies. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can beat the broader indices by a solid margin (see just how much).

Equally as key, positive insider trading sentiment is another way to look at the stock market universe. Just as you’d expect, there are a number of stimuli for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this tactic if piggybackers understand what to do (learn more here).

Now that that’s out of the way, we’re going to analyze the latest info for Landec Corporation (NASDAQ:LNDC).

How are hedge funds trading Landec Corporation (NASDAQ:LNDC)?

Heading into Q3, a total of 12 of the hedge funds we track held long positions in this stock, a change of 9% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes substantially.

Out of the hedge funds we follow, Wynnefield Capital, managed by Nelson Obus, holds the biggest position in Landec Corporation (NASDAQ:LNDC). Wynnefield Capital has a $22.9 million position in the stock, comprising 8.6% of its 13F portfolio. Coming in second is Ariel Investments, managed by John W. Rogers, which held a $7.9 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Jim Simons’s Renaissance Technologies, Robert B. Gillam’s McKinley Capital Management and Richard Driehaus’s Driehaus Capital.

As industrywide interest increased, certain bigger names have been driving this bullishness. Wynnefield Capital, managed by Nelson Obus, assembled the most valuable position in Landec Corporation (NASDAQ:LNDC). Wynnefield Capital had 22.9 million invested in the company at the end of the quarter. John W. Rogers’s Ariel Investments also initiated a $7.9 million position during the quarter. The following funds were also among the new LNDC investors: Jim Simons’s Renaissance Technologies, Robert B. Gillam’s McKinley Capital Management, and Richard Driehaus’s Driehaus Capital.

What do corporate executives and insiders think about Landec Corporation (NASDAQ:LNDC)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time period, Landec Corporation (NASDAQ:LNDC) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Landec Corporation (NASDAQ:LNDC). These stocks are Arabian American Development Co (NYSE:ARSD), Rentech, Inc. (NYSEAMEX:RTK), FutureFuel Corp. (NYSE:FF), Solazyme Inc (NASDAQ:SZYM), and Aceto Corporation (NASDAQ:ACET). This group of stocks are the members of the chemicals – major diversified industry and their market caps are similar to LNDC’s market cap.