Hedge Funds Steering Clear of Nova Measuring Instruments Ltd. (NVMI)

The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined by a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Nova Measuring Instruments Ltd. (NASDAQ:NVMI).

Is Nova Measuring Instruments Ltd. (NASDAQ:NVMI) a buy? The smart money is selling. The number of bullish hedge fund bets fell by 1 recently. At the end of this article we will also compare Nova Measuring Instruments Ltd. to other stocks including Pacific Drilling SA (NYSE:PACD), Antares Pharma Inc (NASDAQ:ATRS), and Harmony Gold Mining Co. (ADR) (NYSE:HMY) to get a better sense of its popularity.

To most investors, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are more than 8,000 funds in operation today, our experts hone in on the masters of this club, around 700 funds. It is estimated that this group of investors watch over bulk of all hedge funds’ total capital, and by tailing their first-class investments, Insider Monkey has brought to light various investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s take a look at the fresh action regarding Nova Measuring Instruments Ltd. (NASDAQ:NVMI).

What have hedge funds been doing with Nova Measuring Instruments Ltd. (NASDAQ:NVMI)?

Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 13% fall from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes substantially (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the biggest position in Nova Measuring Instruments Ltd. (NASDAQ:NVMI). Renaissance Technologies has a $17.4 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Renaissance Technologies’ heels is Chuck Royce of Royce & Associates, with a $1.8 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions comprise Richard Mashaal’s Rima Senvest Management, D E Shaw, and John Overdeck and David Siegel’s Two Sigma Advisors.