Is Veeco Instruments Inc. (VECO) A Good Stock To Buy?

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As industrywide interest jumped, key money managers have been driving this bullishness. Royce & Associates, led by Chuck Royce, assembled the most valuable position in Veeco Instruments Inc. (NASDAQ:VECO). Royce & Associates had $5.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.3 million position during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Veeco Instruments Inc. (NASDAQ:VECO) but similarly valued. These stocks are Harsco Corporation (NYSE:HSC), Federal Signal Corporation (NYSE:FSS), Varonis Systems Inc (NASDAQ:VRNS), and InfraREIT Inc (NYSE:HIFR). This group of stocks’ market valuations resemble VECO’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HSC 19 86982 4
FSS 17 83249 -2
VRNS 17 77160 3
HIFR 12 142129 -4

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $133 million in VECO’s case. Harsco Corporation (NYSE:HSC) is the most popular stock in this table. On the other hand InfraREIT Inc (NYSE:HIFR) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Veeco Instruments Inc. (NASDAQ:VECO) is even less popular than HIFR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None

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