Is IPG Photonics Corporation (NASDAQ:IPGP) a superb stock to buy now? Money managers are becoming less hopeful. The number of long hedge fund positions were trimmed by 5 recently.
At the moment, there are tons of methods investors can use to watch their holdings. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a healthy amount (see just how much).
Just as important, optimistic insider trading sentiment is another way to break down the investments you’re interested in. Just as you’d expect, there are plenty of reasons for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if investors understand what to do (learn more here).
Now, let’s take a look at the latest action surrounding IPG Photonics Corporation (NASDAQ:IPGP).
How are hedge funds trading IPG Photonics Corporation (NASDAQ:IPGP)?
At the end of the fourth quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -36% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly.
Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in IPG Photonics Corporation (NASDAQ:IPGP), worth close to $93.1 million, accounting for 0.3% of its total 13F portfolio. On Royce & Associates’s heels is Cupps Capital Management, managed by Drew Cupps, which held a $24.6 million position; 2.7% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Richard Driehaus’s Driehaus Capital, Jim Simons’s Renaissance Technologies and Andrew Sandler’s Sandler Capital Management.
Seeing as IPG Photonics Corporation (NASDAQ:IPGP) has faced declining sentiment from hedge fund managers, logic holds that there were a few hedge funds that slashed their positions entirely last quarter. It’s worth mentioning that John Thaler’s JAT Capital Management cut the largest position of all the hedgies we watch, worth about $2.9 million in stock.. Israel Englander’s fund, Millennium Management, also dropped its stock, about $1.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds last quarter.
What do corporate executives and insiders think about IPG Photonics Corporation (NASDAQ:IPGP)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past six months. Over the last six-month time period, IPG Photonics Corporation (NASDAQ:IPGP) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to IPG Photonics Corporation (NASDAQ:IPGP). These stocks are Hittite Microwave Corp (NASDAQ:HITT), Marvell Technology Group Ltd. (NASDAQ:MRVL), Microsemi Corporation (NASDAQ:MSCC), Semtech Corporation (NASDAQ:SMTC), and Skyworks Solutions Inc (NASDAQ:SWKS). This group of stocks are in the semiconductor – integrated circuits industry and their market caps are similar to IPGP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Hittite Microwave Corp (NASDAQ:HITT) | 3 | 0 | 0 |
| Marvell Technology Group Ltd. (NASDAQ:MRVL) | 31 | 0 | 1 |
| Microsemi Corporation (NASDAQ:MSCC) | 4 | 0 | 13 |
| Semtech Corporation (NASDAQ:SMTC) | 11 | 0 | 16 |
| Skyworks Solutions Inc (NASDAQ:SWKS) | 20 | 0 | 1 |
With the results shown by Insider Monkey’s time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and IPG Photonics Corporation (NASDAQ:IPGP) is an important part of this process.
