In the eyes of most traders, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the leaders of this group, around 450 funds. It is estimated that this group oversees most of the smart money’s total asset base, and by monitoring their best stock picks, we have come up with a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as key, bullish insider trading sentiment is a second way to break down the financial markets. Just as you’d expect, there are lots of incentives for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the useful potential of this method if you know what to do (learn more here).
With all of this in mind, it’s important to take a look at the latest action surrounding Cubic Corporation (NYSE:CUB).
How are hedge funds trading Cubic Corporation (NYSE:CUB)?
At Q1’s end, a total of 9 of the hedge funds we track were long in this stock, a change of -25% from the previous quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Cubic Corporation (NYSE:CUB), worth close to $80.2 million, comprising 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Michael Doheny of Freshford Capital Management, with a $6.2 million position; 0.9% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Ken Griffin’s Citadel Investment Group, Matthew Knauer and Mina Faltas’s Nokota Management and Cliff Asness’s AQR Capital Management.
Judging by the fact that Cubic Corporation (NYSE:CUB) has experienced a declination in interest from the aggregate hedge fund industry, we can see that there was a specific group of funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Matthew Tewksbury’s Stevens Capital Management sold off the biggest stake of the 450+ funds we track, totaling about $0.4 million in stock.. Murray Stahl’s fund, Horizon Asset Management, also dumped its stock, about $0.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 3 funds last quarter.
What have insiders been doing with Cubic Corporation (NYSE:CUB)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time period, Cubic Corporation (NYSE:CUB) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Cubic Corporation (NYSE:CUB). These stocks are MTS Systems Corporation (NASDAQ:MTSC), Analogic Corporation (NASDAQ:ALOG), II-VI, Inc. (NASDAQ:IIVI), Ion Geophysical Corp (NYSE:IO), and ESCO Technologies Inc. (NYSE:ESE). All of these stocks are in the scientific & technical instruments industry and their market caps are similar to CUB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| MTS Systems Corporation (NASDAQ:MTSC) | 8 | 0 | 3 |
| Analogic Corporation (NASDAQ:ALOG) | 14 | 0 | 4 |
| II-VI, Inc. (NASDAQ:IIVI) | 10 | 0 | 3 |
| Ion Geophysical Corp (NYSE:IO) | 15 | 1 | 3 |
| ESCO Technologies Inc. (NYSE:ESE) | 6 | 0 | 1 |
With the results shown by Insider Monkey’s time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Cubic Corporation (NYSE:CUB) is no exception.
