This Metric Says You Are Smart to Sell Universal Display Corporation (NASDAQ:PANL) – Stratasys, Ltd. (NASDAQ:SSYS), Synaptics, Incorporated (NASDAQ:SYNA)

Universal Display Corporation (NASDAQ:PANL) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.

To most investors, hedge funds are viewed as underperforming, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we hone in on the elite of this club, close to 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total capital, and by paying attention to their highest performing stock picks, we have revealed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Equally as beneficial, positive insider trading activity is another way to break down the stock market universe. There are plenty of motivations for an executive to drop shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).

Consequently, it’s important to take a gander at the latest action surrounding Universal Display Corporation (NASDAQ:PANL).

What does the smart money think about Universal Display Corporation (NASDAQ:PANL)?

In preparation for this year, a total of 13 of the hedge funds we track were long in this stock, a change of -24% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.

According to our comprehensive database, Rob Citrone’s Discovery Capital Management had the most valuable position in Universal Display Corporation (NASDAQ:PANL), worth close to $160 million, comprising 2.3% of its total 13F portfolio. Sitting at the No. 2 spot is Noam Gottesman of GLG Partners, with a $10 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Scott Burney’s Bluefin Investment Management, Eric Bannasch’s Cadian Capital and John A. Levin’s Levin Capital Strategies.

Because Universal Display Corporation (NASDAQ:PANL) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of funds who sold off their positions entirely at the end of the year. At the top of the heap, John Hurley’s Cavalry Asset Management said goodbye to the biggest stake of all the hedgies we monitor, worth an estimated $25 million in stock., and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund dumped about $15 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 4 funds at the end of the year.

What do corporate executives and insiders think about Universal Display Corporation (NASDAQ:PANL)?

Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time frame, Universal Display Corporation (NASDAQ:PANL) has experienced 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Universal Display Corporation (NASDAQ:PANL). These stocks are Stratasys, Ltd. (NASDAQ:SSYS), Nice Systems Ltd (ADR) (NASDAQ:NICE), Electronics For Imaging, Inc. (NASDAQ:EFII), Logitech International SA (USA) (NASDAQ:LOGI), and Synaptics, Incorporated (NASDAQ:SYNA). This group of stocks are the members of the computer peripherals industry and their market caps are closest to PANL’s market cap.

With the returns demonstrated by our tactics, everyday investors should always keep an eye on hedge fund and insider trading activity, and Universal Display Corporation (NASDAQ:PANL) is an important part of this process.

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