Should You Avoid Teradyne, Inc. (TER)?

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Teradyne, Inc. (NYSE:TER).

Is Teradyne, Inc. (NYSE:TER) an excellent investment today? Hedge funds are getting less bullish. The number of long hedge fund bets dropped by 5 lately. At the end of this article, we will also compare Teradyne, Inc. (NYSE:TER) to other stocks, including Syntel, Inc. (NASDAQ:SYNT), Bank Of The Ozarks Inc (NASDAQ:OZRK), and Dun & Bradstreet Corp (NYSE:DNB) to get a better sense of its popularity.

In today’s marketplace, there are many methods market participants employ to assess their holdings. Two of the most innovative methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outclass the S&P 500 by a healthy amount (see the details here).

With all of this in mind, we’re going to take a look at the key action encompassing Teradyne, Inc. (NYSE:TER).

Hedge fund activity in Teradyne, Inc. (NYSE:TER)

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 17% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Glenview Capital holds the number one position in Teradyne, Inc. (NYSE:TER). Glenview Capital has a $231.9 million position in the stock, comprising 1.2% of its 13F portfolio. Sitting at the No. 2 spot is Alkeon Capital Management, led by Panayotis Takis Sparaggis, holding a $66.3 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish encompass Chuck Royce’s Royce & Associates, D E Shaw, and David Harding’s Winton Capital Management.