Hedge Funds Are Buying Intevac, Inc. (IVAC)

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Is it smart to be bullish on Intevac, Inc. (NASDAQ:IVAC)?

To many investors, hedge funds are assumed to be bloated, old investment tools of a period lost to current times. Although there are In excess of 8,000 hedge funds trading currently, Insider Monkey focuses on the aristocrats of this group, about 525 funds. Analysts calculate that this group has its hands on most of all hedge funds’ total assets, and by paying attention to their best equity investments, we’ve revealed a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 33 percentage points in 11 months (find a sample of our picks).

Equally as key, optimistic insider trading activity is another way to look at the marketplace. There are lots of stimuli 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. Various academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).

Intevac, Inc. (NASDAQ:IVAC)

Now that that’s out of the way, we’re going to study the newest info surrounding Intevac, Inc. (NASDAQ:IVAC).

How are hedge funds trading Intevac, Inc. (NASDAQ:IVAC)?

Heading into Q3, a total of 9 of the hedge funds we track were bullish in this stock, a change of 29% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.

When using filings from the hedgies we track, Matt McLennan’s First Eagle Investment Management had the biggest position in Intevac, Inc. (NASDAQ:IVAC), worth close to $19.9 million, comprising 0.1% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $4.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Matthew Drapkin and Steven R. Becker’s Becker Drapkin Management, Jim Simons’s Renaissance Technologies and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Now, particular hedge funds have been driving this bullishness. First Eagle Investment Management, managed by Matt McLennan, established the most valuable position in Intevac, Inc. (NASDAQ:IVAC). First Eagle Investment Management had 19.9 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also made a $4.7 million investment in the stock during the quarter. The following funds were also among the new IVAC investors: Matthew Drapkin and Steven R. Becker’s Becker Drapkin Management, Jim Simons’s Renaissance Technologies, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

How have insiders been trading Intevac, Inc. (NASDAQ:IVAC)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has experienced transactions within the past 180 days. Over the latest 180-day time frame, Intevac, Inc. (NASDAQ:IVAC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Intevac, Inc. (NASDAQ:IVAC). These stocks are SL Industries, Inc. (NYSEAMEX:SLI), Maxwell Technologies Inc. (NASDAQ:MXWL), American Superconductor Corporation (NASDAQ:AMSC), Jinpan International Limited (NASDAQ:JST), and Sparton Corporation (NYSE:SPA). All of these stocks are in the diversified electronics industry and their market caps resemble IVAC’s market cap.

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