AtriCure Inc. (ATRC): Insiders Aren’t Crazy About It

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AtriCure Inc. (NASDAQ:ATRC) was in 7 hedge funds’ portfolio at the end of the fourth quarter of 2012. ATRC investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. There were 7 hedge funds in our database with ATRC holdings at the end of the previous quarter.

Kevin Kotler

If you’d ask most stock holders, hedge funds are viewed as underperforming, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, we choose to focus on the top tier of this group, around 450 funds. Most estimates calculate that this group controls most of the smart money’s total asset base, and by paying attention to their best picks, we have uncovered a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Equally as integral, optimistic insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are many motivations for an insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).

Consequently, it’s important to take a gander at the key action regarding AtriCure Inc. (NASDAQ:ATRC).

Hedge fund activity in AtriCure Inc. (NASDAQ:ATRC)

Heading into 2013, a total of 7 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes significantly.

When looking at the hedgies we track, Kevin Kotler’s Broadfin Capital had the largest position in AtriCure Inc. (NASDAQ:ATRC), worth close to $4.6 million, comprising 1.1% of its total 13F portfolio. On Broadfin Capital’s heels is Manatuck Hill Partners, managed by Mark Broach, which held a $3.9 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Nathan Fischel’s DAFNA Capital Management and Jay Venkatesen’s Ayer Capital Management.

Since AtriCure Inc. (NASDAQ:ATRC) has experienced a declination in interest from hedge fund managers, it’s easy to see that there is a sect of funds that slashed their entire stakes at the end of the year. At the top of the heap, Sander Gerber’s Hudson Bay Capital Management dumped the biggest stake of all the hedgies we monitor, worth an estimated $0.5 million in stock. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about AtriCure Inc. (NASDAQ:ATRC)?

Bullish insider trading is most useful when the company in question has seen transactions within the past half-year. Over the last half-year time frame, AtriCure Inc. (NASDAQ:ATRC) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to AtriCure Inc. (NASDAQ:ATRC). These stocks are Rochester Medical Corporation (NASDAQ:ROCM), Mesa Laboratories, Inc. (NASDAQ:MLAB), IMRIS Inc – Ord Shs (NASDAQ:IMRS), Derma Sciences Inc (NASDAQ:DSCI), and Harvard Bioscience, Inc. (NASDAQ:HBIO). All of these stocks are in the medical instruments & supplies industry and their market caps match ATRC’s market cap.

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