Is Nanometrics Incorporated (NANO) A Good Stock To Buy?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Nanometrics Incorporated (NASDAQ:NANO) but similarly valued. These stocks are Handy and Harman Ltd (NASDAQ:HNH), AEP Industries (NASDAQ:AEPI), Newcastle Investment Corp. (NYSE:NCT), and Bellatrix Exploration Ltd Ordinary Shares (Canada) (NYSE:BXE). This group of stocks’ market values are similar to NANO’s market value.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. That figure was $46 million in NANO’s case. AEP Industries (NASDAQ:AEPI) is the most popular stock in this table. On the other hand Handy and Harman Ltd (NASDAQ:HNH) is the least popular one with only 6 bullish hedge fund positions. Nanometrics Incorporated (NASDAQ:NANO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AEPI might be a better candidate to consider a long position.