Do Hedge Funds and Insiders Love Cray Inc. (NASDAQ:CRAY)?

Cray Inc. (NASDAQ:CRAY) was in 17 hedge funds’ portfolio at the end of December. CRAY has seen an increase in support from the world’s most elite money managers of late. There were 13 hedge funds in our database with CRAY holdings at the end of the previous quarter.

If you’d ask most market participants, hedge funds are seen as underperforming, old financial vehicles of yesteryear. While there are over 8000 funds in operation today, we choose to focus on the leaders of this group, around 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total capital, and by paying attention to their best stock picks, we have spotted a few investment strategies that have historically outpaced 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).


Equally as beneficial, positive insider trading activity is another way to parse down the world of equities. There are plenty of reasons for an insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

Now, let’s take a peek at the latest action surrounding Cray Inc. (NASDAQ:CRAY).

What does the smart money think about Cray Inc. (NASDAQ:CRAY)?

At the end of the fourth quarter, a total of 17 of the hedge funds we track were long in this stock, a change of 31% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Cray Inc. (NASDAQ:CRAY). Royce & Associates has a $12 million position in the stock, comprising 0% of its 13F portfolio. On Royce & Associates’s heels is Dmitry Balyasny of Balyasny Asset Management, with a $4 million position; 0% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Michael Johnston’s Steelhead Partners, John A. Levin’s Levin Capital Strategies and D. E. Shaw’s D E Shaw.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, assembled the biggest position in Cray Inc. (NASDAQ:CRAY). Renaissance Technologies had 2 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $1 million position during the quarter. The other funds with brand new CRAY positions are John A. Levin’s Levin Capital Strategies, Jeffrey Vinik’s Vinik Asset Management, and Neil Chriss’s Hutchin Hill Capital.

How are insiders trading Cray Inc. (NASDAQ:CRAY)?

Bullish insider trading is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, Cray Inc. (NASDAQ:CRAY) has seen zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

With the results exhibited by Insider Monkey’s tactics, everyday investors must always watch hedge fund and insider trading activity, and Cray Inc. (NASDAQ:CRAY) is an important part of this process.

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