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3D Systems Corporation (NYSE:DDD): Hedge Funds and Insiders Are Bullish, What Should You Do?

3D Systems Corporation (NYSE:DDD) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. DDD shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. There were 7 hedge funds in our database with DDD holdings at the end of the previous quarter.

3D Systems Corporation (NYSE:DDD)In the 21st century investor’s toolkit, there are plenty of gauges market participants can use to analyze the equity markets. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the S&P 500 by a healthy margin (see just how much).

Equally as integral, positive insider trading sentiment is a second way to break down the financial markets. Just as you’d expect, there are a variety of motivations for an executive to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).

Consequently, let’s take a look at the recent action surrounding 3D Systems Corporation (NYSE:DDD).

How have hedgies been trading 3D Systems Corporation (NYSE:DDD)?

At year’s end, a total of 8 of the hedge funds we track were bullish in this stock, a change of 14% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.

According to our comprehensive database, Chase Coleman and Feroz Dewan’s Tiger Global Management LLC had the most valuable position in 3D Systems Corporation (NYSE:DDD), worth close to $55 million, comprising 1% of its total 13F portfolio. Coming in second is Criterion Capital, managed by Christopher Lord, which held a $11 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, and Daniel S. Och’s OZ Management.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Criterion Capital, managed by Christopher Lord, assembled the largest position in 3D Systems Corporation (NYSE:DDD). Criterion Capital had 11 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated a $2 million position during the quarter. The other funds with brand new DDD positions are Glenn Russell Dubin’s Highbridge Capital Management, Ryan Frick and Oliver Evans’s Dorsal Capital Management, and Daniel S. Och’s OZ Management.

How are insiders trading 3D Systems Corporation (NYSE:DDD)?

Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, 3D Systems Corporation (NYSE:DDD) has seen 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to 3D Systems Corporation (NYSE:DDD). These stocks are Babcock & Wilcox Co (NYSE:BWC), Crane Co. (NYSE:CR), Lennox International Inc. (NYSE:LII), Sauer-Danfoss Inc. (NYSE:SHS), and The Middleby Corporation (NASDAQ:MIDD). This group of stocks belong to the diversified machinery industry and their market caps match DDD’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Babcock & Wilcox Co (NYSE:BWC) 15 1 1
Crane Co. (NYSE:CR) 19 0 9
Lennox International Inc. (NYSE:LII) 15 0 11
Sauer-Danfoss Inc. (NYSE:SHS) 17 0 0
The Middleby Corporation (NASDAQ:MIDD) 15 0 2

With the results exhibited by the aforementioned time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and 3D Systems Corporation (NYSE:DDD) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Related tickers: 3D Systems Corporation (NYSE:DDD), Babcock & Wilcox Co (NYSE:BWC), Crane Co. (NYSE:CR), Lennox International Inc. (NYSE:LII), Sauer-Danfoss Inc. (NYSE:SHS), The Middleby Corporation (NASDAQ:MIDD)

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