Cubic Corporation (CUB): Are Hedge Funds Right About This Stock? – Analogic Corporation (ALOG), II-VI, Inc. (IIVI)

Cubic Corporation (NYSE:CUB) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. CUB shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 8 hedge funds in our database with CUB positions at the end of the previous quarter.

At the moment, there are plenty of metrics shareholders can use to track Mr. Market. Some of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the broader indices by a very impressive amount (see just how much).

Equally as key, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. Obviously, there are a variety of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if you understand what to do (learn more here).

Now, let’s take a gander at the recent action encompassing Cubic Corporation (NYSE:CUB).

How have hedgies been trading Cubic Corporation (NYSE:CUB)?

At year’s end, a total of 10 of the hedge funds we track held long positions in this stock, a change of 25% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Cubic Corporation (NYSE:CUB), worth close to $74 million, accounting for 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Ken Griffin of Citadel Investment Group, with a $6 million position; the fund has 0% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.

As one would reasonably expect, specific money managers have jumped into Cubic Corporation (NYSE:CUB) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, established the most outsized position in Cubic Corporation (NYSE:CUB). Tudor Investment Corp had 1 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also initiated a $0 million position during the quarter. The only other fund with a brand new CUB position is Mario Gabelli’s GAMCO Investors.

What have insiders been doing with Cubic Corporation (NYSE:CUB)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, Cubic Corporation (NYSE:CUB) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Cubic Corporation (NYSE:CUB). These stocks are MTS Systems Corporation (NASDAQ:MTSC), Analogic Corporation (NASDAQ:ALOG), II-VI, Inc. (NASDAQ:IIVI), Ion Geophysical Corp (NYSE:IO), and ESCO Technologies Inc. (NYSE:ESE). This group of stocks are in the scientific & technical instruments industry and their market caps are similar to CUB’s market cap.

With the results shown by the aforementioned strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Cubic Corporation (NYSE:CUB) shareholders fit into this picture quite nicely.

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