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Is PhotoMedex Inc (PHMD) Going to Burn These Hedge Funds?

Is PhotoMedex Inc (NASDAQ:PHMD) a buy, sell, or hold? The best stock pickers are taking a bullish view. The number of long hedge fund positions advanced by 1 in recent months.

If you’d ask most investors, hedge funds are viewed as underperforming, outdated financial vehicles of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the leaders of this club, close to 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by monitoring their best equity investments, we have unearthed a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as beneficial, positive insider trading activity is a second way to parse down the stock market universe. Obviously, there are plenty of motivations for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if you know what to do (learn more here).

Consequently, we’re going to take a glance at the key action encompassing PhotoMedex Inc (NASDAQ:PHMD).

How have hedgies been trading PhotoMedex Inc (NASDAQ:PHMD)?

In preparation for this quarter, a total of 5 of the hedge funds we track were long in this stock, a change of 25% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.

PhotoMedex Inc (PHMD)According to our comprehensive database, Israel Englander’s Millennium Management had the most valuable position in PhotoMedex Inc (NASDAQ:PHMD), worth close to $9.7 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Jay Petschek and Steven Major’s Corsair Capital Management, Neil Chriss’s Hutchin Hill Capital and Paul Tudor Jones’s Tudor Investment Corp.

Now, key money managers have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the biggest position in PhotoMedex Inc (NASDAQ:PHMD). Tudor Investment Corp had 0.2 million invested in the company at the end of the quarter.

How are insiders trading PhotoMedex Inc (NASDAQ:PHMD)?

Insider buying is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, PhotoMedex Inc (NASDAQ:PHMD) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to PhotoMedex Inc (NASDAQ:PHMD). These stocks are Exactech, Inc. (NASDAQ:EXAC), Natus Medical Inc (NASDAQ:BABY), Syneron Medical Ltd. (NASDAQ:ELOS), Navidea Biopharmaceuticals Inc (NYSEAMEX:NAVB), and Accuray Incorporated (NASDAQ:ARAY). This group of stocks belong to the medical appliances & equipment industry and their market caps resemble PHMD’s market cap.

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