Hedge Funds Are Crazy About Cognex Corporation (CGNX)

Cognex Corporation (NASDAQ:CGNX) was in 10 hedge funds’ portfolio at the end of the first quarter of 2013. CGNX investors should pay attention to an increase in activity from the world’s largest hedge funds lately. There were 7 hedge funds in our database with CGNX positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of methods market participants can use to track publicly traded companies. A duo of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a superb amount (see just how much).

Just as key, bullish insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are a number of reasons for an executive to cut shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).

With all of this in mind, it’s important to take a gander at the key action surrounding Cognex Corporation (NASDAQ:CGNX).

What have hedge funds been doing with Cognex Corporation (NASDAQ:CGNX)?

At Q1’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of 43% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in Cognex Corporation (NASDAQ:CGNX), worth close to $160 million, accounting for 0.5% of its total 13F portfolio. The second largest stake is held by Gregory A. Weaver of Invicta Capital Management, with a $6.7 million position; the fund has 3% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Drew Cupps’s Cupps Capital Management, Andrew Sandler’s Sandler Capital Management and Joel Greenblatt’s Gotham Asset Management.

Now, specific money managers were breaking ground themselves. Cupps Capital Management, managed by Drew Cupps, created the most valuable position in Cognex Corporation (NASDAQ:CGNX). Cupps Capital Management had 5.8 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $1.5 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors and Jim Simons’s Renaissance Technologies.

What have insiders been doing with Cognex Corporation (NASDAQ:CGNX)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past half-year. Over the last 180-day time frame, Cognex Corporation (NASDAQ:CGNX) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Cognex Corporation (NASDAQ:CGNX). These stocks are Coherent, Inc. (NASDAQ:COHR), Geospace Technologies Corp (NASDAQ:GEOS), Ixia (NASDAQ:XXIA), Curtiss-Wright Corp. (NYSE:CW), and Itron, Inc. (NASDAQ:ITRI). This group of stocks are in the scientific & technical instruments industry and their market caps are similar to CGNX’s market cap.

With the results demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Cognex Corporation (NASDAQ:CGNX) applies perfectly to this mantra.

Click here to learn why you should track hedge funds