Nam Tai Electronics, Inc. (NYSE:NTE) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. NTE has experienced an increase in activity from the world’s largest hedge funds of late. There were 9 hedge funds in our database with NTE positions at the end of the previous quarter.
In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the bigwigs of this group, about 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total asset base, and by monitoring their top picks, we have formulated a number of investment strategies that have historically outpaced the 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as integral, bullish insider trading sentiment is another way to break down the world of equities. There are a variety of incentives for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).
Now, let’s take a glance at the key action regarding Nam Tai Electronics, Inc. (NYSE:NTE).
How are hedge funds trading Nam Tai Electronics, Inc. (NYSE:NTE)?
In preparation for this quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 56% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Kahn Brothers, managed by Irving Kahn, holds the most valuable position in Nam Tai Electronics, Inc. (NYSE:NTE). Kahn Brothers has a $46.5 million position in the stock, comprising 6.9% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $22.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Chuck Royce’s Royce & Associates, Phil Frohlich’s Prescott Group Capital Management and Scott Fine and Peter Richards’s Empire Capital Management.
Now, key money managers were breaking ground themselves. Empire Capital Management, managed by Scott Fine and Peter Richards, established the largest call position in Nam Tai Electronics, Inc. (NYSE:NTE). Empire Capital Management had 8.4 million invested in the company at the end of the quarter. Paul Tanico’s Castlerock Asset Management also initiated a $2.5 million position during the quarter. The following funds were also among the new NTE investors: Glenn Russell Dubin’s Highbridge Capital Management, D. E. Shaw’s D E Shaw, and Guru Ramakrishnan’s Meru Capital.
How have insiders been trading Nam Tai Electronics, Inc. (NYSE:NTE)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month 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 check out 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). All of these stocks are in the diversified electronics industry and their market caps are closest to NTE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Orbotech Ltd. (NASDAQ:ORBK) | 5 | 0 | 0 |
| Methode Electronics Inc. (NYSE:MEI) | 10 | 3 | 0 |
| Power One Inc (NASDAQ:PWER) | 13 | 0 | 0 |
| Encore Wire Corporation (NASDAQ:WIRE) | 9 | 0 | 1 |
| Advanced Energy Industries, Inc. (NASDAQ:AEIS) | 13 | 0 | 3 |
With the returns demonstrated by Insider Monkey’s studies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Nam Tai Electronics, Inc. (NYSE:NTE) applies perfectly to this mantra.
