In the eyes of many traders, hedge funds are assumed to be delayed, outdated financial vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open currently, this site looks at the crème de la crème of this group, around 525 funds. It is widely held that this group controls the lion's share of the hedge fund industry's total assets, and by tracking their highest quality equity investments, we've unearthed a few investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outperformed 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as key, bullish insider trading sentiment is another way to look at the investments you're interested in. Obviously, there are lots of reasons for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).
Now that that's out of the way, let's study the recent info about Brooks Automation, Inc. (USA) (NASDAQ:BRKS).
Heading into Q3, a total of 11 of the hedge funds we track held long positions in this stock, a change of 22% from the previous quarter. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings significantly.
When using filings from the hedgies we track, Chuck Royce's Royce & Associates had the largest position in Brooks Automation, Inc. (USA) (NASDAQ:BRKS), worth close to $36.9 million, comprising 0.1% of its total 13F portfolio. Coming in second is Bernard Horn of Polaris Capital Management, with a $30 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Other peers that are bullish include Mark Kingdon's Kingdon Capital, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Cliff Asness's AQR Capital Management.
As industrywide interest increased, particular hedge funds have jumped into Brooks Automation, Inc. (USA) (NASDAQ:BRKS) headfirst. Royce & Associates, managed by Chuck Royce, initiated the most outsized position in Brooks Automation, Inc. (USA) (NASDAQ:BRKS). Royce & Associates had 36.9 million invested in the company at the end of the quarter. Bernard Horn's Polaris Capital Management also initiated a $30 million position during the quarter. The other funds with brand new BRKS positions are Mark Kingdon's Kingdon Capital, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Cliff Asness's AQR Capital Management.
Insider buying is best served when the company we're looking at has seen transactions within the past half-year. Over the latest half-year time period, Brooks Automation, Inc. (USA) (NASDAQ:BRKS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to Brooks Automation, Inc. (USA) (NASDAQ:BRKS). These stocks are ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS), Intermolecular Inc (NASDAQ:IMI), Tessera Technologies, Inc. (NASDAQ:TSRA), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), and ATMI Inc (NASDAQ:ATMI). This group of stocks belong to the semiconductor equipment & materials industry and their market caps match BRKS's market cap.