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Cymer, Inc. (NASDAQ:CYMI): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Cymer, Inc. (NASDAQ:CYMI) was in 21 hedge funds’ portfolio at the end of the fourth quarter of 2012. CYMI investors should be aware of an increase in enthusiasm from smart money in recent months. There were 10 hedge funds in our database with CYMI positions at the end of the previous quarter.

According to most stock holders, hedge funds are seen as worthless, old financial tools of years past. While there are greater than 8000 funds with their doors open at present, we look at the moguls of this club, about 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total asset base, and by paying attention to their top equity investments, we have identified a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat 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 25 percentage points in 6.5 month (see all of our picks from August).

AQR CAPITAL MANAGEMENTJust as integral, optimistic insider trading activity is a second way to parse down the stock market universe. There are plenty of stimuli for an executive to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).

With all of this in mind, it’s important to take a look at the latest action regarding Cymer, Inc. (NASDAQ:CYMI).

What does the smart money think about Cymer, Inc. (NASDAQ:CYMI)?

At the end of the fourth quarter, a total of 21 of the hedge funds we track were bullish in this stock, a change of 110% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Alpine Associates, managed by Robert Emil Zoellner, holds the biggest position in Cymer, Inc. (NASDAQ:CYMI). Alpine Associates has a $125 million position in the stock, comprising 5.1% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which held a $66 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co, Tom Sandell’s Sandell Asset Management and John Bader’s Halcyon Asset Management.

Now, specific money managers have jumped into Cymer, Inc. (NASDAQ:CYMI) headfirst. Alpine Associates, managed by Robert Emil Zoellner, established the biggest position in Cymer, Inc. (NASDAQ:CYMI). Alpine Associates had 125 million invested in the company at the end of the quarter. John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co also made a $30 million investment in the stock during the quarter. The following funds were also among the new CYMI investors: Tom Sandell’s Sandell Asset Management, John Bader’s Halcyon Asset Management, and Carl Tiedemann and Michael Tiedemann’s TIG Advisors.

Insider trading activity in Cymer, Inc. (NASDAQ:CYMI)

Insider buying is best served when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time frame, Cymer, Inc. (NASDAQ:CYMI) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns shown by the aforementioned time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Cymer, Inc. (NASDAQ:CYMI) is no exception.

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

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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