To most market participants, hedge funds are assumed to be slow, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open today, we hone in on the masters of this group, around 450 funds. It is estimated that this group has its hands on the majority of all hedge funds’ total asset base, and by keeping an eye on their highest performing equity investments, we have deciphered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat 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 24 percentage points in 7 months (see the details here).
Just as beneficial, positive insider trading activity is a second way to break down the financial markets. There are plenty of incentives for an executive to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this tactic if piggybackers understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a look at the latest action surrounding Stratasys, Ltd. (NASDAQ:SSYS).
Hedge fund activity in Stratasys, Ltd. (NASDAQ:SSYS)
At the end of the fourth quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of -20% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Stratasys, Ltd. (NASDAQ:SSYS), worth close to $23.2 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Drew Cupps of Cupps Capital Management, with a $18.6 million position; 2.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Richard Driehaus’s Driehaus Capital, D. E. Shaw’s D E Shaw and Mario Gabelli’s GAMCO Investors.
Due to the fact that Stratasys, Ltd. (NASDAQ:SSYS) has faced declining sentiment from the smart money, logic holds that there was a specific group of hedge funds who sold off their entire stakes at the end of the year. It’s worth mentioning that Chase Coleman and Feroz Dewan’s Tiger Global Management LLC sold off the largest position of the 450+ funds we key on, worth about $43.5 million in stock., and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund dropped about $14 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds at the end of the year.
Insider trading activity in Stratasys, Ltd. (NASDAQ:SSYS)
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, Stratasys, Ltd. (NASDAQ:SSYS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Stratasys, Ltd. (NASDAQ:SSYS). These stocks are Electronics For Imaging, Inc. (NASDAQ:EFII), Logitech International SA (USA) (NASDAQ:LOGI), Synaptics, Incorporated (NASDAQ:SYNA), Universal Display Corporation (NASDAQ:PANL), and Nice Systems Ltd (ADR) (NASDAQ:NICE). This group of stocks are the members of the computer peripherals industry and their market caps are similar to SSYS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Electronics For Imaging, Inc. (NASDAQ:EFII) | 12 | 0 | 3 |
| Logitech International SA (USA) (NASDAQ:LOGI) | 11 | 0 | 1 |
| Synaptics, Incorporated (NASDAQ:SYNA) | 9 | 0 | 2 |
| Universal Display Corporation (NASDAQ:PANL) | 13 | 1 | 1 |
| Nice Systems Ltd (ADR) (NASDAQ:NICE) | 14 | 0 | 0 |
With the results demonstrated by our tactics, everyday investors should always watch hedge fund and insider trading activity, and Stratasys, Ltd. (NASDAQ:SSYS) is an important part of this process.
The 7 most bullish money managers:
No. 7:
No. 6:
No. 5:
No. 4:
No. 3:
No. 2:
No. 1:
