If you’d ask most investors, hedge funds are viewed as underperforming, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading at present, we at Insider Monkey hone in on the upper echelon of this club, about 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by paying attention to their highest performing investments, we have formulated a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed 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 25 percentage points in 6.5 month (see the details here).
Equally as key, positive insider trading sentiment is a second way to parse down the stock market universe. There are many reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).
Now, let’s take a glance at the latest action regarding FEI Company (NASDAQ:FEIC).
What have hedge funds been doing with FEI Company (NASDAQ:FEIC)?
In preparation for this year, a total of 17 of the hedge funds we track were long in this stock, a change of -6% from the third quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in FEI Company (NASDAQ:FEIC), worth close to $106 million, comprising 0.3% of its total 13F portfolio. The second largest stake is held by Fisher Asset Management, managed by Ken Fisher, which held a $60 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Andrew Sandler’s Sandler Capital Management, Donald Chiboucis’s Columbus Circle Investors and Thomas Steyer’s Farallon Capital.
Because FEI Company (NASDAQ:FEIC) has witnessed bearish sentiment from hedge fund managers, we can see that there is a sect of hedge funds that decided to sell off their positions entirely last quarter. Interestingly, Robert B. Gillam’s McKinley Capital Management said goodbye to the biggest investment of the “upper crust” of funds we key on, comprising an estimated $5 million in stock.. Christopher Lord’s fund, Criterion Capital, also said goodbye to its stock, about $2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
Insider trading activity in FEI Company (NASDAQ:FEIC)
Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, FEI Company (NASDAQ:FEIC) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the results demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and FEI Company (NASDAQ:FEIC) shareholders fit into this picture quite nicely.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
