Is Electro Scientific Industries, Inc. (NASDAQ:ESIO) a buy, sell, or hold? Money managers are becoming less confident. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
In the financial world, there are tons of indicators investors can use to analyze stocks. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can outperform the broader indices by a superb amount (see just how much).
Just as integral, bullish insider trading sentiment is a second way to parse down the world of equities. Just as you’d expect, there are a variety of reasons for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).
With all of this in mind, let’s take a peek at the recent action surrounding Electro Scientific Industries, Inc. (NASDAQ:ESIO).
How have hedgies been trading Electro Scientific Industries, Inc. (NASDAQ:ESIO)?
Heading into 2013, a total of 8 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly.
Of the funds we track, David Nierenberg’s Nierenberg Investment Management had the largest position in Electro Scientific Industries, Inc. (NASDAQ:ESIO), worth close to $31.5 million, comprising 21.4% of its total 13F portfolio. Coming in second is Martin Whitman of Third Avenue Management, with a $19.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Andy Redleaf’s Whitebox Advisors and Paul Tudor Jones’s Tudor Investment Corp.
Judging by the fact that Electro Scientific Industries, Inc. (NASDAQ:ESIO) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there exists a select few funds who sold off their positions entirely in Q4. Intriguingly, Joel Greenblatt’s Gotham Asset Management dumped the biggest investment of the 450+ funds we key on, valued at close to $1.3 million in stock. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Electro Scientific Industries, Inc. (NASDAQ:ESIO)
Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past half-year. Over the last half-year time frame, Electro Scientific Industries, Inc. (NASDAQ:ESIO) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Electro Scientific Industries, Inc. (NASDAQ:ESIO). These stocks are Zoltek Companies, Inc. (NASDAQ:ZOLT), Coleman Cable, Inc. (NASDAQ:CCIX), Capstone Turbine Corporation (NASDAQ:CPST), Preformed Line Products Company (NASDAQ:PLPC), and Ameresco Inc (NYSE:AMRC). All of these stocks are in the industrial electrical equipment industry and their market caps are similar to ESIO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Zoltek Companies, Inc. (NASDAQ:ZOLT) | 9 | 2 | 0 |
| Coleman Cable, Inc. (NASDAQ:CCIX) | 1 | 1 | 0 |
| Capstone Turbine Corporation (NASDAQ:CPST) | 5 | 0 | 1 |
| Preformed Line Products Company (NASDAQ:PLPC) | 3 | 0 | 3 |
| Ameresco Inc (NYSE:AMRC) | 5 | 3 | 1 |
With the returns demonstrated by the aforementioned studies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Electro Scientific Industries, Inc. (NASDAQ:ESIO) applies perfectly to this mantra.
