Nam Tai Electronics, Inc. (NYSE:NTE) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. NTE has seen a decrease in hedge fund sentiment lately. There were 9 hedge funds in our database with NTE holdings at the end of the previous quarter.
To most market participants, hedge funds are viewed as underperforming, outdated investment tools of the past. While there are over 8000 funds with their doors open today, we look at the top tier of this group, about 450 funds. It is estimated that this group controls most of the hedge fund industry’s total asset base, and by paying attention to their best investments, we have figured out a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as integral, optimistic insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are many motivations for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this method if shareholders know what to do (learn more here).
Keeping this in mind, we’re going to take a glance at the key action regarding Nam Tai Electronics, Inc. (NYSE:NTE).
How have hedgies been trading Nam Tai Electronics, Inc. (NYSE:NTE)?
In preparation for this year, a total of 9 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, Kahn Brothers, managed by Irving Kahn, holds the largest position in Nam Tai Electronics, Inc. (NYSE:NTE). Kahn Brothers has a $39.8 million position in the stock, comprising 6.9% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $24.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Chuck Royce’s Royce & Associates, Phil Frohlich’s Prescott Group Capital Management and Israel Englander’s Millennium Management.
Because Nam Tai Electronics, Inc. (NYSE:NTE) has faced a declination in interest from hedge fund managers, it’s safe to say that there exists a select few money managers who sold off their positions entirely heading into 2013. At the top of the heap, Jeffrey Vinik’s Vinik Asset Management said goodbye to the biggest stake of the “upper crust” of funds we key on, worth about $1.6 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund cut about $1.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Nam Tai Electronics, Inc. (NYSE:NTE)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, Nam Tai Electronics, Inc. (NYSE:NTE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Nam Tai Electronics, Inc. (NYSE:NTE). These stocks are Orbotech Ltd. (NASDAQ:ORBK), Methode Electronics Inc. (NYSE:MEI), Power One Inc (NASDAQ:PWER), Encore Wire Corporation (NASDAQ:WIRE), and Advanced Energy Industries, Inc. (NASDAQ:AEIS). This group of stocks are the members of the diversified electronics industry and their market caps are similar to NTE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Orbotech Ltd. (NASDAQ:ORBK) | 6 | 0 | 0 |
| Methode Electronics Inc. (NYSE:MEI) | 6 | 3 | 0 |
| Power One Inc (NASDAQ:PWER) | 12 | 0 | 0 |
| Encore Wire Corporation (NASDAQ:WIRE) | 8 | 0 | 1 |
| Advanced Energy Industries, Inc. (NASDAQ:AEIS) | 13 | 0 | 3 |
With the returns demonstrated by our studies, retail investors must always pay attention to hedge fund and insider trading activity, and Nam Tai Electronics, Inc. (NYSE:NTE) is no exception.
