Do Hedge Funds Love Hurco Companies, Inc. (HURC)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Hurco Companies, Inc. (NASDAQ:HURC) to find out whether it was one of their high conviction long-term ideas.

Hurco Companies, Inc. (NASDAQ:HURC) was in 7 hedge funds’ portfolio at the end of September. Hurco Companies, Inc. (NASDAQ:HURC) has seen an increase in hedge fund sentiment recently. There were 6 hedge funds in our database with Hurco Companies, Inc. (NASDAQ:HURC) positions at the end of the previous quarter. At the end of this article we will also compare HURC to other stocks including Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG), VIVUS, Inc. (NASDAQ:VVUS), and Marchex, Inc. (NASDAQ:MCHX) to get a better sense of its popularity.

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To most stock holders, hedge funds are viewed as worthless, old financial tools of yesteryear. While there are over 8000 funds with their doors open at present, Experts at hedge fund tracking site Insider Monkey look at the top tier of this group, about 700 funds. These hedge fund managers control bulk of all hedge funds’ total asset base, and by tailing their matchless investments, Insider Monkey has uncovered a few investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Now, let’s take a gander at the new action surrounding Hurco Companies, Inc. (NASDAQ:HURC).

How have hedgies been trading Hurco Companies, Inc. (NASDAQ:HURC)?

At the end of Q3, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 17% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who amassed substantial positions

Of the funds tracked by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Hurco Companies, Inc. (NASDAQ:HURC). Royce & Associates has a $25.4 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is AlphaOne Capital Partners, led by Paul Hondros, holding a $2.7 million position; 1.1% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Tim Curro’s Value Holdings LP.

As one would reasonably expect, key money managers were leading the bulls’ herd. AlphaOne Capital Partners created the most outsized position in Hurco Companies, Inc. (NASDAQ:HURC). Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also made a $0.9 million investment in the stock during the quarter.

Let’s also examine hedge fund activity in other stocks similar to Hurco Companies, Inc. (NASDAQ:HURC). We will take a look at Bravo Brio Restaurant Group, Inc. (NASDAQ:BBRG), VIVUS, Inc. (NASDAQ:VVUS), Marchex, Inc. (NASDAQ:MCHX), and Ballard Power Systems Inc. (USA) (NASDAQ:BLDP). This group of stocks’ market valuations are closest to Hurco Companies, Inc. (NASDAQ:HURC)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BBRG 16 17571 0
VVUS 11 27840 0
MCHX 11 21879 -2
BLDP 4 568 1

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. Hurco Companies is much less popular than many of the stocks mentioned in the table above, which suggest that it is not the best alternative for a long investment at the moment. We will keep monitoring the hedge fund activity surrounding Hurco and provide you with updates.