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Hedge Funds Are Selling FLIR Systems, Inc. (NASDAQ:FLIR)

Is FLIR Systems, Inc. (NASDAQ:FLIR) undervalued? The best stock pickers are in a bearish mood. The number of bullish hedge fund bets dropped by 2 lately.

FLIR Systems, Inc.

According to most stock holders, hedge funds are assumed to be unimportant, old investment tools of yesteryear. While there are greater than 8000 funds trading at present, we hone in on the crème de la crème of this group, close to 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total capital, and by paying attention to their highest performing stock picks, we have identified a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Equally as integral, bullish insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are a number of stimuli for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).

With these “truths” under our belt, it’s important to take a peek at the latest action encompassing FLIR Systems, Inc. (NASDAQ:FLIR).

Hedge fund activity in FLIR Systems, Inc. (NASDAQ:FLIR)

In preparation for this year, a total of 15 of the hedge funds we track held long positions in this stock, a change of -12% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully.

Of the funds we track, Wallace R. Weitz & Co., managed by Wallace Weitz, holds the most valuable position in FLIR Systems, Inc. (NASDAQ:FLIR). Wallace R. Weitz & Co. has a $67 million position in the stock, comprising 2.9% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $41 million position; 0% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.

Due to the fact that FLIR Systems, Inc. (NASDAQ:FLIR) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds that slashed their entire stakes heading into 2013. It’s worth mentioning that SAC Subsidiary’s CR Intrinsic Investors dropped the biggest investment of the 450+ funds we monitor, comprising an estimated $6 million in stock., and David Harding of Winton Capital Management was right behind this move, as the fund dumped about $3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds heading into 2013.

Insider trading activity in FLIR Systems, Inc. (NASDAQ:FLIR)

Insider buying is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last half-year time frame, FLIR Systems, Inc. (NASDAQ:FLIR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns exhibited by our strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and FLIR Systems, Inc. (NASDAQ:FLIR) applies perfectly to this mantra.

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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