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Should You Avoid Ultratech, Inc. (NASDAQ:UTEK)?

Is Ultratech, Inc. (NASDAQ:UTEK) ready to raly soon? Money managers are getting less bullish. The number of long hedge fund positions dropped by 1 recently.

In the eyes of most stock holders, hedge funds are seen as unimportant, old financial vehicles of yesteryear. While there are over 8000 funds in operation at present, we look at the upper echelon of this club, close to 450 funds. It is widely believed that this group oversees the majority of the smart money’s total asset base, and by tracking their highest performing picks, we have found a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to 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 the details here).

Ultratech, Inc. (NASDAQ:UTEK)

Just as key, positive insider trading sentiment is a second way to parse down the marketplace. Obviously, there are a number of incentives for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the latest action regarding Ultratech, Inc. (NASDAQ:UTEK).

Hedge fund activity in Ultratech, Inc. (NASDAQ:UTEK)

In preparation for this year, a total of 17 of the hedge funds we track were bullish in this stock, a change of -6% from the third quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes substantially.

When looking at the hedgies we track, Dorsal Capital Management, managed by Ryan Frick and Oliver Evans, holds the most valuable position in Ultratech, Inc. (NASDAQ:UTEK). Dorsal Capital Management has a $37 million position in the stock, comprising 4.9% of its 13F portfolio. On Dorsal Capital Management’s heels is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $33 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that hold long positions include Donald Chiboucis’s Columbus Circle Investors, Clint Carlson’s Carlson Capital and Drew Cupps’s Cupps Capital Management.

Because Ultratech, Inc. (NASDAQ:UTEK) has faced a declination in interest from the entirety of the hedge funds we track, we can see that there is a sect of money managers who were dropping their entire stakes heading into 2013. At the top of the heap, Robert B. Gillam’s McKinley Capital Management dropped the biggest stake of the 450+ funds we track, valued at close to $2 million in stock., and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund sold off about $1 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds heading into 2013.

What have insiders been doing with Ultratech, Inc. (NASDAQ:UTEK)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time period, Ultratech, Inc. (NASDAQ:UTEK) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

With the results shown by the aforementioned studies, retail investors must always monitor hedge fund and insider trading activity, and Ultratech, Inc. (NASDAQ:UTEK) 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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