This Metric Says You Are Smart to Buy Hurco Companies, Inc. (HURC)

Hurco Companies, Inc. (NASDAQ:HURC) investors should be aware of an increase in support from the world’s most elite money managers of late.

If you’d ask most stock holders, hedge funds are viewed as unimportant, old investment tools of the past. While there are more than 8000 funds with their doors open at present, we hone in on the aristocrats of this group, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by paying attention to their best investments, we have uncovered a few investment strategies that have historically outpaced the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, optimistic insider trading activity is another way to parse down the marketplace. Obviously, there are a variety of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if “monkeys” understand what to do (learn more here).

Consequently, let’s take a glance at the latest action encompassing Hurco Companies, Inc. (NASDAQ:HURC).

How have hedgies been trading Hurco Companies, Inc. (NASDAQ:HURC)?

In preparation for this quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of 25% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Hurco Companies, Inc. (NASDAQ:HURC), worth close to $23.7 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Wilmot B. Harkey and Daniel Mack of Nantahala Capital Management, with a $5 million position; 0.8% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.

As aggregate interest increased, some big names have jumped into Hurco Companies, Inc. (NASDAQ:HURC) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the most valuable position in Hurco Companies, Inc. (NASDAQ:HURC). Two Sigma Advisors had 0.3 million invested in the company at the end of the quarter.

What do corporate executives and insiders think about Hurco Companies, Inc. (NASDAQ:HURC)?

Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Hurco Companies, Inc. (NASDAQ:HURC) has experienced 1 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 Hurco Companies, Inc. (NASDAQ:HURC). These stocks are GSI Group Inc. (USA) (NASDAQ:GSIG), Zygo Corporation (NASDAQ:ZIGO), Telenav Inc (NASDAQ:TNAV), Mitcham Industries, Inc. (NASDAQ:MIND), and Vishay Precision Group Inc (NYSE:VPG). This group of stocks are the members of the scientific & technical instruments industry and their market caps are similar to HURC’s market cap.