This Metric Says You Are Smart to Sell Cantel Medical Corp. (CMN)

Is Cantel Medical Corp. (NYSE:CMN) a bargain? Prominent investors are selling. The number of bullish hedge fund bets were trimmed by 2 lately.

To the average investor, there are tons of gauges shareholders can use to analyze publicly traded companies. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outperform the broader indices by a healthy margin (see just how much).

Just as key, positive insider trading activity is another way to parse down the world of equities. Just as you’d expect, there are lots of stimuli for a bullish insider 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 shareholders understand where to look (learn more here).

Now, we’re going to take a glance at the recent action encompassing Cantel Medical Corp. (NYSE:CMN).

What have hedge funds been doing with Cantel Medical Corp. (NYSE:CMN)?

Heading into Q2, a total of 9 of the hedge funds we track were long in this stock, a change of -18% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Diker Management, managed by Mark N. Diker, holds the largest position in Cantel Medical Corp. (NYSE:CMN). Diker Management has a $54.9 million position in the stock, comprising 15% of its 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $8.5 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Israel Englander’s Millennium Management, Chuck Royce’s Royce & Associates and Cliff Asness’s AQR Capital Management.

Since Cantel Medical Corp. (NYSE:CMN) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of funds that slashed their full holdings last quarter. Intriguingly, Mike Vranos’s Ellington sold off the largest investment of the 450+ funds we watch, totaling close to $0.7 million in stock.. Steven Cohen’s fund, SAC Capital Advisors, also dumped its stock, about $0.4 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds last quarter.

What have insiders been doing with Cantel Medical Corp. (NYSE:CMN)?

Insider buying is best served when the company in question has seen transactions within the past 180 days. Over the last six-month time period, Cantel Medical Corp. (NYSE:CMN) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Cantel Medical Corp. (NYSE:CMN). These stocks are Endologix, Inc. (NASDAQ:ELGX), Luminex Corporation (NASDAQ:LMNX), Conceptus, Inc. (NASDAQ:CPTS), Tornier N.V. (NASDAQ:TRNX), and ICU Medical, Incorporated (NASDAQ:ICUI). This group of stocks are in the medical instruments & supplies industry and their market caps are similar to CMN’s market cap.