Is Teradyne, Inc. (NYSE:TER) an attractive investment now? Hedge funds are in a pessimistic mood. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
In the 21st century investor’s toolkit, there are tons of metrics investors can use to monitor stocks. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can outpace the S&P 500 by a healthy amount (see just how much).
Just as key, optimistic insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are a number of motivations for an executive to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this method if you understand where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the key action surrounding Teradyne, Inc. (NYSE:TER).
What does the smart money think about Teradyne, Inc. (NYSE:TER)?
Heading into Q2, a total of 27 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Teradyne, Inc. (NYSE:TER), worth close to $307 million, comprising 0.9% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $117.8 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Panayotis Takis Sparaggis’s Alkeon Capital Management, Thomas E. Claugus’s GMT Capital and Christopher Lord’s Criterion Capital.
Seeing as Teradyne, Inc. (NYSE:TER) has faced a declination in interest from hedge fund managers, logic holds that there is a sect of hedgies that elected to cut their full holdings last quarter. At the top of the heap, Neil Chriss’s Hutchin Hill Capital said goodbye to the largest investment of the 450+ funds we track, worth an estimated $6.4 million in stock., and Scott Fine and Peter Richards of Empire Capital Management was right behind this move, as the fund said goodbye to about $4.6 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Teradyne, Inc. (NYSE:TER)?
Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past 180 days. Over the last half-year time period, Teradyne, Inc. (NYSE:TER) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Teradyne, Inc. (NYSE:TER). These stocks are United Microelectronics Corp (ADR) (NYSE:UMC), Siliconware Precision Industries (ADR) (NASDAQ:SPIL), and Cymer, Inc. (NASDAQ:CYMI). All of these stocks are in the semiconductor equipment & materials industry and their market caps are closest to TER’s market cap.