3D Systems Corporation (DDD): This Data Is Screaming ‘Buy’

Is 3D Systems Corporation (NYSE:DDD) going to take off soon? Money managers are getting more optimistic. The number of bullish hedge fund positions advanced by 1 lately.

To most investors, hedge funds are viewed as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we look at the aristocrats of this club, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by monitoring their best equity investments, we have determined a number of investment strategies that have historically outperformed the market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see the details here).

Just as integral, optimistic insider trading activity is another way to break down the world of equities. Obviously, there are many reasons for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this method if you understand what to do (learn more here).

With these “truths” under our belt, let’s take a glance at the recent action encompassing 3D Systems Corporation (NYSE:DDD).

How are hedge funds trading 3D Systems Corporation (NYSE:DDD)?

In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 14% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.

Of the funds we track, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC had the largest position in 3D Systems Corporation (NYSE:DDD), worth close to $55.5 million, comprising 1% of its total 13F portfolio. Coming in second is Criterion Capital, managed by Christopher Lord, which held a $11.4 million position; 0.6% of its 13F portfolio is allocated to the stock. Other hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, and Daniel S. Och’s OZ Management.

Now, specific money managers have been driving this bullishness. Criterion Capital, managed by Christopher Lord, created the most valuable position in 3D Systems Corporation (NYSE:DDD). Criterion Capital had 11.4 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $2 million investment in the stock during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management, Ryan Frick and Oliver Evans’s Dorsal Capital Management, and Daniel S. Och’s OZ Management.

What do corporate executives and insiders think about 3D Systems Corporation (NYSE:DDD)?

Insider purchases made by high-level executives is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, 3D Systems Corporation (NYSE:DDD) has experienced 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to 3D Systems Corporation (NYSE:DDD). These stocks are Babcock & Wilcox Co (NYSE:BWC), Crane Co. (NYSE:CR), Lennox International Inc. (NYSE:LII), Sauer-Danfoss Inc. (NYSE:SHS), and The Middleby Corporation (NASDAQ:MIDD). This group of stocks are in the diversified machinery industry and their market caps are closest to DDD’s market cap.

With the returns demonstrated by the aforementioned studies, retail investors must always monitor hedge fund and insider trading activity, and 3D Systems Corporation (NYSE:DDD) applies perfectly to this mantra.

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