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Hedge Funds Are Betting On Natus Medical Inc (NASDAQ:BABY) – GenMark Diagnostics, Inc (NASDAQ:GNMK), Symmetry Medical Inc. (NYSE:SMA)

Natus Medical Inc (NASDAQ:BABY) was in 15 hedge funds’ portfolio at the end of December. BABY investors should pay attention to an increase in hedge fund interest recently. There were 14 hedge funds in our database with BABY holdings at the end of the previous quarter.

In the eyes of most traders, hedge funds are viewed as underperforming, outdated investment tools of years past. While there are more than 8000 funds in operation today, we choose to focus on the elite of this club, about 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total asset base, and by tracking their best investments, we have determined a few investment strategies that have historically beaten the S&P 500 index. 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Just as key, optimistic insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are a variety of reasons for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).

Now, we’re going to take a gander at the recent action encompassing Natus Medical Inc (NASDAQ:BABY).

Hedge fund activity in Natus Medical Inc (NASDAQ:BABY)

At year’s end, a total of 15 of the hedge funds we track were bullish in this stock, a change of 7% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Broadfin Capital, managed by Kevin Kotler, holds the biggest position in Natus Medical Inc (NASDAQ:BABY). Broadfin Capital has a $30 million position in the stock, comprising 7.4% of its 13F portfolio. Sitting at the No. 2 spot is OrbiMed Advisors, managed by Samuel Isaly, which held a $18 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include J. Carlo Cannell’s Cannell Capital, SAC Subsidiary’s CR Intrinsic Investors and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Now, specific money managers were leading the bulls’ herd. Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, created the biggest position in Natus Medical Inc (NASDAQ:BABY). Bryn Mawr Capital had 0 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $0 million position during the quarter. The other funds with brand new BABY positions are Neil Chriss’s Hutchin Hill Capital and Steven Cohen’s SAC Capital Advisors.

Insider trading activity in Natus Medical Inc (NASDAQ:BABY)

Insider buying is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last 180-day time frame, Natus Medical Inc (NASDAQ:BABY) has seen 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Natus Medical Inc (NASDAQ:BABY). These stocks are Syneron Medical Ltd. (NASDAQ:ELOS), Invacare Corporation (NYSE:IVC), Symmetry Medical Inc. (NYSE:SMA), Cynosure, Inc. (NASDAQ:CYNO), and GenMark Diagnostics, Inc (NASDAQ:GNMK). This group of stocks belong to the medical appliances & equipment industry and their market caps are closest to BABY’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Syneron Medical Ltd. (NASDAQ:ELOS) 12 0 0
Invacare Corporation (NYSE:IVC) 14 0 0
Symmetry Medical Inc. (NYSE:SMA) 9 0 2
Cynosure, Inc. (NASDAQ:CYNO) 14 0 5
GenMark Diagnostics, Inc (NASDAQ:GNMK) 7 0 6

With the results shown by our time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Natus Medical Inc (NASDAQ:BABY) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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