Hedge Funds Are Crazy About Ion Geophysical Corp (IO)

Ion Geophysical Corp (NYSE:IO) was in 15 hedge funds’ portfolio at the end of March. IO shareholders have witnessed an increase in hedge fund interest recently. There were 13 hedge funds in our database with IO holdings at the end of the previous quarter.

If you’d ask most market participants, hedge funds are perceived as worthless, outdated investment tools of years past. While there are over 8000 funds trading today, we hone in on the top tier of this club, around 450 funds. It is widely believed that this group oversees most of all hedge funds’ total capital, and by paying attention to their top picks, we have formulated a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as important, bullish insider trading activity is a second way to break down the investments you’re interested in. Obviously, there are lots of reasons for an executive to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this tactic if piggybackers know what to do (learn more here).

Keeping this in mind, let’s take a glance at the key action surrounding Ion Geophysical Corp (NYSE:IO).

How are hedge funds trading Ion Geophysical Corp (NYSE:IO)?

Heading into Q2, a total of 15 of the hedge funds we track held long positions in this stock, a change of 15% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Daruma Asset Management, managed by Mariko Gordon, holds the most valuable position in Ion Geophysical Corp (NYSE:IO). Daruma Asset Management has a $39.9 million position in the stock, comprising 2% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Glenn Russell Dubin’s Highbridge Capital Management, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, assembled the most valuable position in Ion Geophysical Corp (NYSE:IO). Renaissance Technologies had 1.6 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.4 million investment in the stock during the quarter. The other funds with brand new IO positions are Neil Chriss’s Hutchin Hill Capital, David Harding’s Winton Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.

Insider trading activity in Ion Geophysical Corp (NYSE:IO)

Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past half-year. Over the last six-month time frame, Ion Geophysical Corp (NYSE:IO) has seen 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).

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