Veeco Instruments Inc. (NASDAQ:VECO) has experienced a decrease in enthusiasm from smart money lately.
According to most traders, hedge funds are seen as underperforming, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey look at the moguls of this group, about 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total capital, and by tracking their highest performing equity investments, we have unsheathed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as important, positive insider trading sentiment is a second way to parse down the marketplace. Obviously, there are many stimuli for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this method if you know where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the key action regarding Veeco Instruments Inc. (NASDAQ:VECO).
How have hedgies been trading Veeco Instruments Inc. (NASDAQ:VECO)?
In preparation for this year, a total of 15 of the hedge funds we track were long in this stock, a change of -6% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Veeco Instruments Inc. (NASDAQ:VECO). Royce & Associates has a $110 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Ken Fisher of Fisher Asset Management, with a $65 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Robert Karr’s Joho Capital and Joel Greenblatt’s Gotham Asset Management.
Because Veeco Instruments Inc. (NASDAQ:VECO) has faced falling interest from the smart money, we can see that there exists a select few money managers that slashed their positions entirely at the end of the year. Interestingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC sold off the largest position of the “upper crust” of funds we watch, totaling an estimated $21 million in stock., and John Kleinheinz of Kleinheinz Capital Partners was right behind this move, as the fund sold off about $19 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds at the end of the year.
What have insiders been doing with Veeco Instruments Inc. (NASDAQ:VECO)?
Insider buying is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time frame, Veeco Instruments Inc. (NASDAQ:VECO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s tactics, retail investors must always pay attention to hedge fund and insider trading activity, and Veeco Instruments Inc. (NASDAQ:VECO) applies perfectly to this mantra.
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.