Do Hedge Funds and Insiders Love Cepheid (CPHD)?

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Cepheid (NASDAQ:CPHD) was in 11 hedge funds’ portfolio at the end of March. CPHD shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 14 hedge funds in our database with CPHD positions at the end of the previous quarter.


According to most investors, hedge funds are seen as slow, outdated investment vehicles of years past. While there are more than 8000 funds trading at present, we hone in on the leaders of this group, about 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total asset base, and by keeping an eye on their top stock picks, we have figured out a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as key, positive insider trading activity is another way to parse down the marketplace. There are plenty of incentives for an insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know what to do (learn more here).

With these “truths” under our belt, it’s important to take a glance at the key action regarding Cepheid (NASDAQ:CPHD).

What have hedge funds been doing with Cepheid (NASDAQ:CPHD)?

Heading into Q2, a total of 11 of the hedge funds we track were long in this stock, a change of -21% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.

When looking at the hedgies we track, Cupps Capital Management, managed by Drew Cupps, holds the most valuable position in Cepheid (NASDAQ:CPHD). Cupps Capital Management has a $13.4 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by GAMCO Investors, managed by Mario Gabelli, which held a $9.4 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include D. E. Shaw’s D E Shaw, Jeremy Green’s Redmile Group and Ken Griffin’s Citadel Investment Group.

Due to the fact that Cepheid (NASDAQ:CPHD) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies that slashed their full holdings at the end of the first quarter. Intriguingly, Andreas Halvorsen’s Viking Global dumped the biggest position of the 450+ funds we watch, comprising about $84.8 million in stock.. David Goel and Paul Ferri’s fund, Matrix Capital Management, also sold off its stock, about $12.7 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 3 funds at the end of the first quarter.

What have insiders been doing with Cepheid (NASDAQ:CPHD)?

Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, Cepheid (NASDAQ:CPHD) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Cepheid (NASDAQ:CPHD). These stocks are Cognex Corporation (NASDAQ:CGNX), Bio-Rad Laboratories, Inc. (NYSE:BIO), Itron, Inc. (NASDAQ:ITRI), Bruker Corporation (NASDAQ:BRKR), and FEI Company (NASDAQ:FEIC). This group of stocks are the members of the scientific & technical instruments industry and their market caps resemble CPHD’s market cap.

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