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Hedge Funds Are Betting On FARO Technologies, Inc. (FARO)

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FARO Technologies, Inc. (NASDAQ:FARO) has seen an increase in activity from the world’s largest hedge funds recently.

In the eyes of most market participants, hedge funds are seen as underperforming, outdated financial vehicles of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the aristocrats of this group, close to 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by watching their highest performing picks, we have identified a few investment strategies that have historically outperformed the S&P 500 index. 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, bullish insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are plenty of incentives for an insider to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).

Keeping this in mind, we’re going to take a peek at the recent action encompassing FARO Technologies, Inc. (NASDAQ:FARO).

What have hedge funds been doing with FARO Technologies, Inc. (NASDAQ:FARO)?

Heading into Q2, a total of 13 of the hedge funds we track were long in this stock, a change of 44% from the first quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.

FARO Technologies, Inc. (NASDAQ:FARO)According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the largest position in FARO Technologies, Inc. (NASDAQ:FARO). Royce & Associates has a $59.5 million position in the stock, comprising 0.2% of its 13F portfolio. On Royce & Associates’s heels is Gregory A. Weaver of Invicta Capital Management, with a $6.7 million position; 3% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Ken Griffin’s Citadel Investment Group.

Consequently, key money managers have been driving this bullishness. Invicta Capital Management, managed by Gregory A. Weaver, created the most valuable position in FARO Technologies, Inc. (NASDAQ:FARO). Invicta Capital Management had 6.7 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also initiated a $3 million position during the quarter. The other funds with brand new FARO positions are Drew Cupps’s Cupps Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Steven Cohen’s SAC Capital Advisors.

How are insiders trading FARO Technologies, Inc. (NASDAQ:FARO)?

Insider buying is particularly usable when the company in focus has seen transactions within the past six months. Over the last 180-day time frame, FARO Technologies, Inc. (NASDAQ:FARO) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to FARO Technologies, Inc. (NASDAQ:FARO). These stocks are Analogic Corporation (NASDAQ:ALOG), MTS Systems Corporation (NASDAQ:MTSC), Measurement Specialties, Inc. (NASDAQ:MEAS), Badger Meter, Inc. (NYSE:BMI), and Rofin-Sinar Technologies (NASDAQ:RSTI). This group of stocks belong to the scientific & technical instruments industry and their market caps are closest to FARO’s market cap.

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