Advanced Energy Industries, Inc. (NASDAQ:AEIS) investors should be aware of a decrease in enthusiasm from smart money recently.
According to most investors, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the leaders of this club, about 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total asset base, and by paying attention to their top picks, we have found a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as beneficial, optimistic insider trading sentiment is a second way to break down the stock market universe. There are lots of reasons for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a gander at the latest action encompassing Advanced Energy Industries, Inc. (NASDAQ:AEIS).
What does the smart money think about Advanced Energy Industries, Inc. (NASDAQ:AEIS)?
At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -7% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Advanced Energy Industries, Inc. (NASDAQ:AEIS), worth close to $45.6 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $7.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Joel Greenblatt’s Gotham Asset Management, Jim Simons’s Renaissance Technologies and Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners.
Due to the fact that Advanced Energy Industries, Inc. (NASDAQ:AEIS) has witnessed a declination in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of fund managers that slashed their positions entirely in Q4. At the top of the heap, Andy Redleaf’s Whitebox Advisors sold off the largest stake of all the hedgies we track, worth about $0.5 million in stock.. David Costen Haley’s fund, HBK Investments, also said goodbye to its stock, about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds in Q4.
Insider trading activity in Advanced Energy Industries, Inc. (NASDAQ:AEIS)
Insider buying is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last 180-day time period, Advanced Energy Industries, Inc. (NASDAQ:AEIS) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Advanced Energy Industries, Inc. (NASDAQ:AEIS). These stocks are Methode Electronics Inc. (NYSE:MEI), Power One Inc (NASDAQ:PWER), Sanmina Corp (NASDAQ:SANM), Nam Tai Electronics, Inc. (NYSE:NTE), and Encore Wire Corporation (NASDAQ:WIRE). This group of stocks are the members of the diversified electronics industry and their market caps are closest to AEIS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Methode Electronics Inc. (NYSE:MEI)||6||3||0|
|Power One Inc (NASDAQ:PWER)||12||0||0|
|Sanmina Corp (NASDAQ:SANM)||18||0||1|
|Nam Tai Electronics, Inc. (NYSE:NTE)||9||0||0|
|Encore Wire Corporation (NASDAQ:WIRE)||8||0||1|
With the results shown by Insider Monkey’s studies, retail investors should always pay attention to hedge fund and insider trading activity, and Advanced Energy Industries, Inc. (NASDAQ:AEIS) is no exception.