LTX-Credence Corp (LTXC): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do? – Nova Measuring Instruments Ltd. (NVMI), Nanometrics Incorporated (NANO)

LTX-Credence Corp (NASDAQ:LTXC) was in 11 hedge funds’ portfolio at the end of December. LTXC shareholders have witnessed an increase in enthusiasm from smart money lately. There were 8 hedge funds in our database with LTXC holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are plenty of metrics investors can use to monitor the equity markets. Two of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can outpace the S&P 500 by a significant margin (see just how much).

Equally as key, positive insider trading activity is another way to break down the stock market universe. Obviously, there are plenty of stimuli for an insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).

Keeping this in mind, we’re going to take a glance at the latest action regarding LTX-Credence Corp (NASDAQ:LTXC).

What does the smart money think about LTX-Credence Corp (NASDAQ:LTXC)?

In preparation for this year, a total of 11 of the hedge funds we track were bullish in this stock, a change of 38% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.

Of the funds we track, Eric Bannasch’s Cadian Capital had the biggest position in LTX-Credence Corp (NASDAQ:LTXC), worth close to $17.7 million, comprising 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $11.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Brett Hendrickson’s Nokomis Capital and Cliff Asness’s AQR Capital Management.

As aggregate interest increased, key money managers have been driving this bullishness. Nokomis Capital, managed by Brett Hendrickson, assembled the most valuable position in LTX-Credence Corp (NASDAQ:LTXC). Nokomis Capital had 5 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.3 million position during the quarter. The only other fund with a brand new LTXC position is Israel Englander’s Millennium Management.

How are insiders trading LTX-Credence Corp (NASDAQ:LTXC)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time period, LTX-Credence Corp (NASDAQ:LTXC) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to LTX-Credence Corp (NASDAQ:LTXC). These stocks are Cohu, Inc. (NASDAQ:COHU), Daqo New Energy Corp (NYSE:DQ), Nova Measuring Instruments Ltd. (NASDAQ:NVMI), Nanometrics Incorporated (NASDAQ:NANO), and Enphase Energy Inc (NASDAQ:ENPH). This group of stocks are the members of the semiconductor equipment & materials industry and their market caps resemble LTXC’s market cap.

With the returns exhibited by our tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and LTX-Credence Corp (NASDAQ:LTXC) is no exception.

Click here to learn why you should track hedge funds