If you’d ask most traders, hedge funds are viewed as underperforming, outdated investment vehicles of the past. While there are greater than 8000 funds trading at the moment, we look at the aristocrats of this group, about 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their best stock picks, we have identified a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as integral, optimistic insider trading sentiment is a second way to parse down the world of equities. There are a variety of stimuli for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).
Keeping this in mind, let’s take a look at the key action surrounding Universal Display Corporation (NASDAQ:PANL).
What does the smart money think about Universal Display Corporation (NASDAQ:PANL)?
Heading into 2013, 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’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Rob Citrone’s Discovery Capital Management had the largest position in Universal Display Corporation (NASDAQ:PANL), worth close to $160.3 million, comprising 2.3% of its total 13F portfolio. Coming in second is GLG Partners, managed by Noam Gottesman, which held a $10.3 million position; 0.5% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Scott Burney’s Bluefin Investment Management, Eric Bannasch’s Cadian Capital and John A. Levin’s Levin Capital Strategies.
Seeing as Universal Display Corporation (NASDAQ:PANL) has witnessed declining sentiment from hedge fund managers, logic holds that there lies a certain “tier” of money managers that elected to cut their entire stakes in Q4. It’s worth mentioning that John Hurley’s Cavalry Asset Management said goodbye to the biggest stake of all the hedgies we monitor, totaling about $24.9 million in stock., and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund said goodbye to about $15.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in Q4.
What do corporate executives and insiders think about Universal Display Corporation (NASDAQ:PANL)?
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the last 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 go over 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 similar to PANL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Stratasys, Ltd. (NASDAQ:SSYS) | 12 | 0 | 0 |
| Nice Systems Ltd (ADR) (NASDAQ:NICE) | 14 | 0 | 0 |
| 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 |
With the returns exhibited by our time-tested strategies, retail investors should always pay attention to hedge fund and insider trading activity, and Universal Display Corporation (NASDAQ:PANL) applies perfectly to this mantra.
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