This Metric Says You Are Smart to Buy NuVasive, Inc. (NASDAQ:NUVA)

NuVasive, Inc. (NASDAQ:NUVA) was in 20 hedge funds’ portfolio at the end of December. NUVA has seen an increase in hedge fund sentiment lately. There were 19 hedge funds in our database with NUVA holdings at the end of the previous quarter.

To the average investor, there are dozens of indicators investors can use to track stocks. A duo of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can beat the market by a significant amount (see just how much).

NuVasive, Inc. (NASDAQ:NUVA)

Equally as beneficial, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are many incentives for an insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this tactic if piggybackers understand where to look (learn more here).

With all of this in mind, we’re going to take a look at the recent action surrounding NuVasive, Inc. (NASDAQ:NUVA).

What does the smart money think about NuVasive, Inc. (NASDAQ:NUVA)?

In preparation for this year, a total of 20 of the hedge funds we track were long in this stock, a change of 5% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

When looking at the hedgies we track, Deerfield Management, managed by James E. Flynn, holds the most valuable position in NuVasive, Inc. (NASDAQ:NUVA). Deerfield Management has a $29 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is CR Intrinsic Investors, managed by SAC Subsidiary, which held a $10 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Steven Cohen’s SAC Capital Advisors, Ken Fisher’s Fisher Asset Management and Cliff Asness’s AQR Capital Management.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Deerfield Management, managed by James E. Flynn, created the biggest position in NuVasive, Inc. (NASDAQ:NUVA). Deerfield Management had 29 million invested in the company at the end of the quarter. SAC Subsidiary’s CR Intrinsic Investors also made a $10 million investment in the stock during the quarter. The other funds with brand new NUVA positions are Kevin Kotler’s Broadfin Capital, Joseph A. Jolson’s Harvest Capital Strategies, and Joel Greenblatt’s Gotham Asset Management.

Insider trading activity in NuVasive, Inc. (NASDAQ:NUVA)

Bullish insider trading is at its handiest when the company in question has experienced transactions within the past six months. Over the latest 180-day time frame, NuVasive, Inc. (NASDAQ:NUVA) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned research, retail investors should always keep an eye on hedge fund and insider trading sentiment, and NuVasive, Inc. (NASDAQ:NUVA) 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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