3D Systems Corporation (NYSE:DDD) has seen an increase in activity from the world's largest hedge funds of late.
In the eyes of most shareholders, hedge funds are viewed as worthless, old investment vehicles of years past. While there are greater than 8000 funds trading at the moment, we look at the aristocrats of this group, close to 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry's total capital, and by watching their best stock picks, we have identified a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, positive insider trading activity is another way to break down the marketplace. As the old adage goes: there are plenty of stimuli for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).
Now, it's important to take a gander at the recent action surrounding 3D Systems Corporation (NYSE:DDD).
Heading into Q2, a total of 12 of the hedge funds we track were long in this stock, a change of 20% from the first quarter. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Chase Coleman and Feroz Dewan's Tiger Global Management LLC had the biggest position in 3D Systems Corporation (NYSE:DDD), worth close to $77.8 million, accounting for 1.2% of its total 13F portfolio. On Tiger Global Management LLC's heels is Ken Griffin of Citadel Investment Group, with a $15.7 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Christopher Lord's Criterion Capital and Daniel S. Och's OZ Management.
Consequently, key hedge funds have jumped into 3D Systems Corporation (NYSE:DDD) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in 3D Systems Corporation (NYSE:DDD). Arrowstreet Capital had 9.8 million invested in the company at the end of the quarter. Christopher Lord's Criterion Capital also initiated a $3.2 million position during the quarter. The other funds with brand new DDD positions are Philip Hempleman's Ardsley Partners, Philippe Jabre's Jabre Capital Partners, and Michael Hintze's CQS Cayman LP.
Insider trading activity, especially when it's bullish, is most useful when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, 3D Systems Corporation (NYSE:DDD) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the returns shown by Insider Monkey's tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and 3D Systems Corporation (NYSE:DDD) shareholders fit into this picture quite nicely.